The 3-month growth cycle

At start, I believed growth will come each month. Then realised that growth comes in stages. I have narrowed it to 3-month cycle for our business. How do these 3 months cycle look like?

👋 Hola! Welcome to Out of Singapore. This is Shan and I write every Sunday on business and health. Last 3-months was solely focused on introducing longevity principles for my readers. I saw the interest decline over time, and I received a very good feedback last week. Here is a snippet of it -

“I was more engaged with your first generation posts. They were unique and expressing who you were. Now the content is more about your business. Your blog was to get to know Shan, now it’s Xandro”

To be honest, I have always faced this problem. I have meant to write small series multiple times - Google, Facebook, TikTok, Social Media. I have not been able to complete any of these series. Personally, while I decided to write more on health and the industry, I was thinking about the future. What am I going to write for the longest time? How will this evolve? What should my readers know me for?

I don’t have the answers. I have some ideas. They will evolve. However, I am sure that this is my space to talk. A space to share my life and learnings. I will continue journaling what’s happening around me. I will aim to keep it original and close.

Over the next few weeks, I will speak about topics I have held myself back on. I have been grinding to scale the brand and get out of the stagnation rut. Seems to have worked for past two months. It also fits a patten - growth is not linear but comes in step jumps. I found this to be approximately 3-month cycle.

The 3-month growth cycle vs 0-1 journey

Have a look at this chart and tell me what does it look like?

Revenue trend for Xandro Lab since last year

This chart shows our monthly revenue as we crossed our 0-1 phase. If you notice, the growth is not linear. It stagnates almost every 3-months. These months are the hardest. During this phase, you question everything about the business and it takes mental and physical toll.

Compared to this, the 0 to 1 phase looks entirely different. It comes before this growth phase. When you are trying to get your first orders to build your consumer base, the focus is find people who care about these products. These people are experimental and if given value, they will try you out. They will tell you what they care about. They will ask you questions (tells you what they care about). They will try hard to break you down.

If you keep meeting their requirements, they will be impressed and be with for you for long time. They will introduce you to their friends. They will start recommending you on public platforms. They will become your promoters. This is when you put gas on growth engine. This is when you get into the 3-month cycle to growth.

Month 1: Celebrate. Scaled to a new milestone

Month 2: Stabilize. Get all processes and systems to work based on the new benchmark.

Month 3: Try again, hard. Test and try to break out of the benchmark.

Let’s get into details.

M1: Celebrating, aiming for next milestone

This is the first month of the terrible 3-month cycle. This would usually start with a celebration since we crossed a milestone. At the same time, you set eyes on your next milestone.

Here are some questions I ask myself:

1. What’s the new milestone I need to hit?

2. What are my options? Can I create new options?

3. What are the tricks, hacks and methods?

4. Have they worked before, can I try them frugally?

Question 1 is simpler to answer. Depending on the business, you would have your priority. For me, priority 1 was being cash flow positive and priority 2 was being EBITDA profitable. Yes, you can be cash flow positive before being profitable. Being profitable and not cash flow positive is dangerous for survival of business.

Being cash flow positive translated into certain metrics. Let’s approximately say, I needed to hit monthly revenues of SGD 90,000 and cap my marketing expenses to SGD 35,000. There were other constraints as well, but let’s ignore them for simplicity.

Profitability would come at SGD 150,000 monthly revenue and SGD 40,000 marketing expenses. These formed my milestones to cross as soon as possible. However, you can’t press a magic button to reach there. That’s where options come into place.

1. Existing options - Current products, sale channels (distribution) and promotions.

2. New options - New products, new sale channels and promotions.

Identifying these options or opportunities becomes critical to reach the milestone. I saw these opportunities in my last stagnation phase

1. TikTok videos were not generating enough sales.

2. Livestream revenue per stream was low.

3. DTC repeat rate was high, meaning our acquisition funnel was poor.

Essentially, you have to continuously press all the buttons at your disposal and see which responds positively. Then give them more fuel (money).

M2: Stabilize. Ensure the system is prepared.

Most often different departments and teams run at different speed. Revenue and growth (performance marketing) are generally running everyday. Fulfilment is playing the catch up game, but is aware of the recent growth. Production works in 3-4 month cycle and they tend to be most surprised when the pressure to produce more increases.

Production > Storage > Marketing > Sales > Fulfilment

This is general cycle of a product going from conception to customer. But as the growth starts, marketing and sales become the front runners of the business and production and storage follow along. This is where things break.

Production is complicated because this involves purchasing and production scheduling. For a growing physical product business, this becomes the bottleneck. Hence, the second month should be spent in getting this to speed. It would mean

1. Adding more production centres. If needed, find and add contract manufacturers.

2. Bulk purchase inventory for next 3-6 months.

3. Arrange cash to fund this operation.

Finally, the marketing, sales and customer service needs to evolve as well.

For marketing and sales, it will be -

1. How do we retain these new customers? (Cross sell)

2. How do I reduce my acquisition cost for similar customers?

For customer service, it will be - How do we keep these new customers engaged?

The first and second month is to prepare the whole company to absorb new demand from consumers (orders, complaints, service requests, products).

M3: Scale. Start pushing the gas again.

Once the dust has settled, you have been successful in maintaining your new milestone for 2 months, and the team is prepared, now push the gas and test a new milestone.

By this time, you will realise several cracks. These cracks could be:

1. The sale channels are breaking. They have stopped growing.

2. Customers are not happy. Meaning no point to scale without fixing these issues.

3. Inventory isn’t enough. You may not enough money or people to produce the needed inventory to scale.

4. Marketing ROI isn’t efficient and optimised for growth. You may end up burning money if you scale.

5. The teams and people are stretched beyond their bandwidth.

Fix what you can, and then keep pushing ahead. Some parts of the business will learn when there is pain. When they see that the demand is inevitable, then will come along and become your partner.

At this stage, if you see some things are not working out and you don’t see a hope (intention or drive), change them. The specific partner or team member are not built or not ready for the business journey.

The third month is when new growth experiments must be carried out. Can it be -

1. A new form of livestream? (Guests, offers, place or streamer)

2. A new product focus?

3. A new type of offer?

4. A new story?

5. New ad formats?

6. New ad platforms?

We updated our TikTok advertising more than 5 times from April 2024 to July 2024. It helped us find the right signs and scale TikTok advertising. We are still testing new ways on TikTok on a weekly basis.

If these interventions work out, soon signs of scale will show and month 4 will be a much higher number than your previous 3-months. Now, enter a new cycle. Rinse and repeat. Celebrate, stabilize, test and scale. Hahaha, it’s fun.

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I enjoyed writing today. It was zero google or ChatGPT search. I just wrote. I wrote after taking a lonnnng afternoon nap. 😆 I also saved myself from having the Teh-C Cheesecake at Starbucks. 🤣

Let me know how you liked today’s write up.

Jisoo seems to have grown up 🥹

Thank you so much for reading this week’s edition. Have a great week ahead! Cheers. 🥛🥛🥛🥛🥛