Crossing the Growth Chasm: How to Approach Scaling Your Small Business

If you’ve felt stuck in your growth trajectory, wondering why your leads aren’t converting into sustained growth, you’re not alone. The growth chasm represents a pivotal period of challenges, where product-market fit, sales processes, and operations are put to the test.

The good news? With the right mindset, strategic action, and a tailored approach, this chasm is entirely crossable. Let’s explore what the growth chasm is, why it exists, and how small businesses can conquer it effectively based on our direct experience.

Video Transcript:

Jason Brewer (00:00) – What is the Growth Chasm?

So Matt, there’s this book by Geoffrey Moore called Crossing the Chasm, and it talks about how early stage companies, especially ones that are serious innovations, products, new products, that have some very early adopters, and then hit a point where they struggle, where that next round of later adopters has not connected with this innovation and they struggle for months, years through fundraising.
We see that, we work with early-stage companies, but we also work with a lot of small businesses who hit sort of this small business marketing chasm that I think is similar, where maybe it’s not quite the level of innovation in a product — it could be a service, could be a professional services company, whatever — and we start to drive growth for them, and we’re on our way up, and then we hit this point where we’re looking down into a chasm and we have to cross that somehow.

There’s a couple different ways that this comes about, but I think about this chasm. You’ve experienced it a lot, sort of in the middle of the situation trying to help companies. What are the most common ways that you see this chasm come up?

Matthew Sommer (01:15) – How to Start Identifying Bottlenecks

I mean, being in a marketing agency and kind of doing what we do, quite often we’re brought into a situation with the idea of “I just need more leads” or “I just need more opportunities to help my business grow.” And at the end of the day, that’s certainly an ingredient, that’s a piece of what goes into it, but your business won’t just grow with more leads or opportunities.

There’s definitely stages and phases of this where, “Oh, I got a whole lot more leads, but I’m not closing them. For whatever reason they’re not turning into customers and I’m spending good money generating these leads, but I need more of them to become customers.” So is that a sales funnel thing? We’ve had opportunities where the phone rings, but the sales person’s already on a call so they can’t pick up that phone when it rings. And maybe that person calls another provider or company. Or focusing in on the sales thing again, that sales pitch or the way that we’re handling that doesn’t quite connect in the way that we want it to.

Or again, it doesn’t have to just be sales oriented. It could be a whole product market fit aspect where the way we’re pricing it, the value isn’t perceived appropriately by the audience, and maybe that’s not a sales pitch problem, maybe that’s just how we’re thinking about the pricing and how the pricing is shaped generally speaking.

Even beyond that, we’ve had clients where all of a sudden 200 leads come in when the historic average was 50 and 200 come in a month. And maybe the sales team is able to keep up with that. Maybe we are getting them in the pipeline or one way or another, and all of a sudden our operational ability to deliver on it isn’t there, so now we’ve got this waiting list that’s a mile long and maybe this is something that’s kind of urgent for people, and so they’re going to drop right off that waiting list. Right?

So there’s just so many different aspects of this, and I tend to see that in trends or in vignettes I guess, right? Where, okay, we’ve gotten the leads and now we need to focus in on capturing them. We’re not connecting with them, and we spend a lot of time focusing in that area, and all of a sudden our connection rate’s a whole lot higher. At least we’re getting on the phone with these leads, we’re connecting with them via email, and that’s great, but now we’re having those conversations and that’s great, but they’re not closing. And so now we need to focus on that area and it seldom happens all at once, so maybe there’s not just one growth chasm, right?

Maybe it’s a series of dips. That growth curve, that kind of upward trajectory, the hockey stick we all want to see, it’s seldom actually shaped like that, I think. And really it’s a constant push through the next issue or the next problem that comes up throughout the business as a whole, not just from the sort of top of funnel marketing part of it — it’s how all those pieces fit together.

Jason Brewer (04:18) – How A Growing Pipeline Can Stunt Growth

But there’s definitely a difference we’ve seen when a million dollar company suddenly has a pipeline worth two and a half million and they’ve got to figure that out. And it’s not always… I mean it definitely highlights the issues pretty quickly. 

And when you have 50 leads a month coming in and your sales team can do very customized follow-ups with everyone and ask how Jimmy did in his baseball game on Saturday, and then all of a sudden you have 200 leads and you can barely get those follow-ups out and not in a timely fashion, it gives off a completely different vibe to your customers. So yeah, I think whether you’re used to a 3 million pipeline and that jumps to six or seven and you’re heading for that, it’s a totally different game.

Matthew Sommer (05:09) – Why There’s No One-Size-Fits-All Solution

And I think we’ve been in a position to see people in businesses come apart at the seams more often than a lot of people, right? Because that’s our whole job, because that’s the role that we come in for. And it’s just always a little bit different where those seams are, and how it kind of comes apart — what causes the wheels to start to come off. 

And every time it’s an all hands, we need to focus on this area and get it fixed, but it’s always just a very different solution or approach for how to look into that. I wouldn’t say that it’s the same problems and the same prescribed solution in every case it’s so different.

Are you a seasonal business and you’re trying to deal with the shoulder seasons or the off seasons? Are you a business that’s based on a certain thing happening that causes the problem that you’re solving and for months that thing stops happening, or the whole industry or the way people are thinking about that thing changes? 

It’s not a one size fits all solution in those types of situations. It’s thinking through the problem deeply and working together from all aspects — from marketing, from sales, from operations, from product development or whatever, to really pinpoint what that issue is and figure out how to solve it.

Jason Brewer (06:27) – Why Our Responsibility Extends Beyond Lead Generation

And at the end of the day, we are a marketing agency, but I oftentimes, in our deck that we’ll show to potential clients, one of the main things we say is we hire problem solvers because that’s what our job is a lot of the time. A lot of agencies say, “We do SEO” or “We do paid search, we’ll drive you leads” and that’s it. Our job’s done at that point, and you take it from here, good or bad. We have decided that as growth consultants that’s part of what that means, is our responsibility extends beyond that first wave of additional leads. It’s how do we handle those leads? How do we help you grow the business? And I think we’ve, through painful problem solving exercises, have gotten there.

Matthew Sommer (07:17) – The Multi-Sided Problem That is Growth

Several of the businesses I’m working with directly, certainly we drive opportunity generation or brand awareness growth or whatever that might be, but then we’re also helping with the recruiting pipeline. We’re advertising job openings and opportunities. We’re helping to sculpt the job descriptions in a way that’s appealing to the target market. We’re helping to gauge benefits and things like that relative to competitors to help make sure that you’re able to recruit, to fill the seats, to do the extra work that you’re now generating. Growth is a multi-sided problem, and so to call ourselves growth consultants and just run Facebook ads and report on the number of clicks or whatever, it’s just not solving the problem – it’s not going to help you grow.

H2: Jason Brewer (08:11) – The Need to Adapt & Change

Not to mention, we’ve gone through many economic cycles and seasons in 21 years now and we’ve seen how things change in the market. In one quarter we need to slow the leads down, and the next quarter it’s really hard to drum them up, and being able to adapt and change course and not just have a one size fits all strategy and solution is huge when it comes to that.