Graduate from Local Startup to High-Growth Business

By: Walker Peek, CEO, Residential Acoustics

WalkerPeek_picIt’s challenging to get your business idea off the ground from an initial concept to putting money in the bank. Even tougher, but rarely discussed, is “crossing the chasm” to that larger market where you’ve scaled to bring a product or service to the economy-at-large. Ask local entrepreneurs and they’ll tell you the mental and emotional strains result in a turbulent swing, from the highs (new contracts, great hires) to lows (disgruntled employees, unhappy customers, and late deliveries). We saw great potential with Residential Acoustics after early sales and customer feedback. Here’s the roadmap we’ve followed to take our small startup from the kitchen to international distribution.

Most small businesses, around 95%, will remain small for the length of their lives, due primarily to their nature (laundromats, restaurants, retail) or being service-oriented, and thus largely-dependent on skilled knowledge workers (legal, accounting, and engineering firms). Each firm will define “success” differently, depending on its mission, profitability and strategic goals. However, there are some major milestones that are applicable to businesses across nearly all industries – if you can maneuver through each of these, you’ll be well on your way to strong growth and independence.

  1. Product Development – Bring Your Idea to Life!

This is the step most people consider “inventing,” where your creativity helps bring a concept into reality. I’ve always adhered to the sentiment, “Documentation is the difference between an idea and an invention.” How many times have you heard someone say they’ve got the next great idea? But without any meat on the bones (product and market research, defining its functions and requirements, sketching some concepts) it rarely goes anywhere. Keep as much documentation as you can, including your product requirements, functionality, photos of prototypes and testing data. Not only does this help better define what your product (or service) can provide, but it also makes future design iterations more manageable.

Our current AcoustiCurtainTM has come a long way from our initial prototypes

Our current AcoustiCurtainTM has come a long way from our initial prototypes

It’s amazing how far our AcoustiCurtainTM product line has come from the initial, conceptual design. After realizing the problem (keeping my fiancée up at night), I found the right material and form for a product – a soundproofing curtain that can roll up and down, while still blocking about 90% of the sound passing through.

However, after years of experimenting with various fabrics, adhesive Velcro and reinforcing materials, the current product hardly reflects its humble beginnings. Speed to market is key, so be ambitious about getting your first product out quickly, but don’t forget to constantly incorporate customer feedback so that you can achieve continuous improvement. We schedule a quarterly meeting to review customer recommendations and incorporate whichever changes truly add value to our products.

  1. Customer Testing and Validation – Know your Market

Now getting it to market – it’s scary to think you’ve got a product, and selling it on the Web, you’re forcing it on unsuspecting customers. We followed the Lean Startup Model, where we sold the prototype early on to get customer feedback and make any revisions once hearing their thoughts. For instance, we realized that customers did not really care what fabric options they had (other than color), since they really purchased the soundproof curtains for their function more than aesthetics. However, they were cost-conscious customers that did not want to pay the expense of those plusher materials or more intricately designed patterns. We removed the premium fabrics and went back to our basic product offering, which in turn drove sales to new highs.

Our first sales channel was a WordPress site that I designed myself with no programming background and only YouTube as a tutor (and a great one at that!). We received sales within weeks, after taking some photos in the spare bedroom, and were cash-flow positive with only a $3,000 bootstrapping fund.

We continued to iterate the product design, but once we received consistent, positive feedback from a variety of customers (B2C consumers and B2B enterprise customers), we locked down our design studies and trade-offs and began to scale production.

  1. Scale Production

Once your product has really been tested and you’ve received customer validation, you can begin scaling. If you haven’t needed external funding yet, you very well may need it now! Capital equipment and inventory needs, regardless of your industry, can often take financing outside your means. Since it has a useful life over years, you’ll receive its benefits long after it’s been paid off.

You can take a loan (scary) or angel investment from friends and family (trust me – just as scary), but be sure to carefully document your assumptions and have reasonable expectations for your business’s growth.

Our first orders we sent to a sewing workroom in Lutz where they were able to handle a few curtains to several dozen at a time without us needing to worry about overhead and workforce. However, once we began selling hundreds per month, with the vast majority of them being custom-made, we realized it was time to open our own manufacturing capability. Starting with a few hundred square feet and an industrial Juki sewing machine, we’ve grown into a 3000-sq. ft. facility with a full-time team. We continue to streamline our process with new equipment and continued employee training, preparing for the large growth we project over the next several months.

  1. Grow Your Sales Team!

And finally, we arrive at the penultimate milestone of developing a sales process and hiring sales people. This is ultimately where the rubber meets the road. If the market demands your product, then you have a potential homerun and just need to reach the right customers and purchasers to achieve large-scale success.

As an engineer, it’s been easy over the years to look at our sales teams and assume that it was the high-quality product selling itself. Nothing could be further from the truth. Developing a successful sales process takes time and effort, outlining how you are feeding prospects into your pipeline, what information and sales techniques you use to promote them to leads, and finally, how you close these into actual sales.

Many startups take the shotgun approach, trying to reach out to everyone that may need their product, directly or otherwise. However, with limited resources, this can stretch the burn rate to its limit, and end up bankrupting a firm before a loyal customer base catches it.

Pay careful attention to your customer acquisition cost (CAC) and customer lifetime value (CLV), which is highly dependent on customer type and recurring sales. For our firm, the majority of B2C customers buy only once, outfitting soundproof curtains over their bedroom or office windows, or in some cases, on doors and hallways to limit sound in their home-space. We may get the occasional referral, but we need to be conscious of the customer’s buying nature. This means we must constantly reach new customers through targeted marketing and advertising campaigns.

At the same time, our B2B customers (property managers and construction firms) often buy large quantities, and in some cases use them at multiple locations and properties. Getting these customers into our sales funnel begins with cold calls and drop-ins, and matures to detailed discussions and ultimately price negotiations. While it may take several months to get your first true sale, realize that your next one may be right behind that, since all of the infrastructure (and sales process) has been built. Keeping your pipeline full, and flowing forward, makes a world of difference on the bottom line. To maximize the conversion of sales from each node (prospect, lead and sale) we focus on engaged sales team training, and allow them to tailor the sales process to their strengths.

Extended Success:

Every startup faces these critical challenges and oftentimes it takes an iterative approach to improve the product and reach the right market segment. By following a systematic approach, we’ve been able to overcome a number of obstacles and mistakes, and graduate from a local startup to a high-growth international business.

For more information on Residential Acoustics, visit

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