There are very few universal laws in marketing and business and this is one of them: every business has constraints. These constraints determine how you operate, how you market, how you plan your growth.
Some of them can be entirely removed, others cannot. To make things even more weird (we’re not dealing with exact science here, sorry!) sometimes it’s a good idea to leave a few of these constraints in place.
A quick note before you dig in: you may already know that I have a visceral hate for “10x” used in sales pitches: “let us 10x your social media following”. In this context, it’s a placeholder, a shorthand of sorts. As you read, replace it with 2x, 7x, 12.3x, or however much you want to x your business.
What’s preventing you from 10xing your business overnight?
In a perfect world, it would be enough to announce that you launched a business or a product and people would flock to it. You’d be a millionaire (billionaire?) overnight and spend 6 days a week sipping cocktails from a coconut on a Caribbean beach.
Why does this never happen? Because of one or more of these constraints.
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Your Total Addressable Market (TAM) is too small
TAM is the first thing you need to look at when you start a business or launch a new product. This metric tells you how many people are interested in what you’re selling.
Small TAMs are very common when you over-niche your business. Luckily, TAM is also very easy to calculate. Websites like IDC or Gartner have research reports on nearly all market sizes, often divided by regions. Google Trends is a good place to figure out if the interest in what you’re selling is increasing or decreasing. Or you can simply Google “[industry name] market size”.
Sometimes, you’ll need to cross-reference the data with other sources, which will require some digging.
Let’s look at an example: say you are a fitness coach looking to serve people over 50 in the US. They can buy your 1:1 coaching yearly package for $2K.
Statista tells us there are 116 million people over 50 in the US.
The TAM formula is:
Number of customers in a market X annual value/customer
==> 116 million X 2,000 = $232 billion
This is your TAM and it’s reasonably sized. BUT
You can only capture a small fraction of your total addressable market
TAM has two cousins:
- SAM (Serviceable Addressable Market) aka the people you can reasonably pitch to
- SOM (Serviceable Obtainable Market) aka the slice you can realistically convert into clients.
They’re usually represented like this:
From an impressive $200+ billion, our fitness coach could take home less than $100K/year once you calculate the SAM and the SOM. I won’t bore you with math, you can find the formulas here and I encourage you to apply them to your own business or product before you launch it.
Let’s move on to the next constraint your business may face.
There’s not enough time to serve all your customers
This constraint is very common for service-based businesses and freelancers: there is only so much time in a day. When you hit a plateau, you have three options:
- You increase your prices
- You hire more people
- You turn some of your services into products
Since you can neither 10x (or even 2x) your prices overnight or hire 10x more people in a week, the solution is usually a combination of the two: you gradually increase your prices and hire more people as your revenue grows.
I tried doing both of these things simultaneously and nearly killed my first business. I know I’m not an outlier here, we all want to seize the momentum and grow as much as possible as quickly as possible. Be smarter than me — do it gradually!
Option no. 3 isn’t always possible. If you build websites, for instance, you can automate or templatize some of your work, but you will never be able to sell everything as a product.
Our fitness coach, on the other hand, can productize his 1:1 coaching sessions into pre-recorded workouts that his clients can watch anytime. Or he can partner up with a nutritionist and add diet packages on top of the fitness coaching.
My own business is similar: my most expensive product is, in fact, a service — a 1:1 strategy session. I can’t possibly take on 10 times more clients than I work with right now. Nor can I hire someone else to do these sessions for me — it has to be me. I can (and will) increase my prices but I won’t 10x them.
The solution? Build new digital products. I’m currently working on a new one that will launch soon. You’ll find it at the end of this email and you’d help me a LOT if you voted on its viability!
You don’t drive enough traffic/generate enough leads
You’ve got the goods but no one is buying them? Time to invest more in marketing and sales!
One of the biggest business fallacies I know is “build it and they will come”. No, they won’t. How could they?
- Did you give them the address?
- Did you tell them what’s in it for them if they show up (like a good party host does)?
- Did you reach enough of them?
- Did you reach the right people? You don’t advertise cheap dentures at Burning Man.
I’ve worked with 400+ brands to date and this is the constraint most of them struggled with: the market is large enough, their audience needs what they’re selling but they can’t get to that audience.
A few people disagreed with me on this LinkedIn post but it’s a hill I’m willing to die on:
If you can get at least 1,000 pairs of eyes on your offers every day and get a very conservative 0,5% conversion rate, you should be making 5 sales a day.
Not there yet?
- Your audience may not be large enough. How to increase your audience.
- You’re on the wrong channel. Test a couple of other channels.
- Your content isn’t compelling enough. My agency can help you write content that gets you leads and sales.
- The toughest thing to admit:
Your product isn’t good enough
If you check all the boxes above, this is the final boss in your quest for market domination: a subpar product.
Good is an umbrella term here. Your product itself may be OK — it’s functioning properly and it’s doing the job you promised it would do. But:
- There may not be enough demand for it. Sell something else.
- Your target audience doesn’t have the money to pay for it. Target a different audience or lower the prices.
Before you do either of these things, talk to your clients and get their honest feedback: what did they love about your product/service and what did they hate about it? Oftentimes, a few small tweaks can change how a product is perceived altogether.
Struggling to kill off a product/service you invested A LOT in? I get it — it’s very hard! Depersonalize the negative feedback you get to make things easier: it’s not about you, it’s about the product. This won’t be the last product you create. You’ll get the next ones right!
You’ve reached the ceiling
Every business in every industry has a ceiling: the point where, no matter what you do, you can’t grow your revenue anymore. Even monopolies have a ceiling. Obviously, some ceilings are lower than others (which brings us back to TAM).
As soon as you get close to yours, consider your options:
- Diversify to tap into new markets/audiences (our fitness coach can start targeting people under 50).
- Expand to new verticals: Mr. Beast sells chocolate bars and other food items. Starbucks sells coffee in supermarkets. Taylor Swift sells…anything, from merch and concert tickets to sponsored Instagram stories and albums in various formats.
- Accept that enough is enough. This is my favorite option. Have you ever considered what your “enough” is?
How to use this to grow your business
- If your TAM (Total Addressable Market) is too small, little else matters. Start by figuring out what other segments you can include in your target audience.
- Go through all of the constraints above, in the order I listed them. You will bump into yours eventually.
- Account for the age of your business as well. It’s relatively easy to 10x your revenue in your second year but you will eventually reach a plateau.
A final word of caution: this is an exercise in humility. Some of these constraints are objective, like the size of a market and the number of competitors in it. You can’t change those BUT you can change what you sell and whom you sell it too.
It’s never the market’s fault, it’s always the seller’s.
Save for once-in-a-lifetime events like the pandemic that killed a lot of hospitality businesses with very few pivoting options, it’s up to the seller to know when and how to pivot.
Go through this list and identify what prevents you from 10xing your business. Be honest with yourself — what’s the glaring mistake you’re making? We all make at least one.
Once you’ve eliminated that growth barrier, it’s up to you if you want to move on to the next or if you think you’ve reached your “enough”. Remember, 10x is a placeholder, you may not need/want a business that’s 10 times more profitable.
Before I sign off, a quick question about the product I’m planning to launch soon: it’s a template to help you build your own marketing strategy from scratch. You’ll have my help at every stage, with pointers and actionable tips on where to find the data or how to fill it in.
Your outcome?
++ Clarity on your journey
++ Easily identifiable blockers and mistakes
++ Easy to track progress and double down on what works
Price: around $50.
Please click on YES or NO to let me know if you are interested or not.
[Yes, this may be the second time you see this survey because I botched the links the first time around 🤦]
That’s it from me today!
See you next week!
Here to make you think,
Adriana
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Adriana’s Picks
- “Lazy girl job” is the newest Gen-Z-powered trend: low-stress, low-effort roles that pay decently well ($60 to $80k) while allowing plenty of freedom and flexibility.
- The irony is biting: Zoom wants its employees to come back to the office.
- How much would you spend to add 10 years to your life? The longevity industry is booming.
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Need me in your corner? There are three ways I can help you:
- Get my product launch email templates that sell: 5+1 emails you can send to your list in 45 seconds.
- Book a 1:1 strategy session with me. Let’s unlock your growth in 60 mins!
- Get content or copy that converts AND ranks. My digital marketing agency is here.
