Growth vs Monetisation: The futile battle
Monday January 16, 2017,
4 min Read
In an up close and personal interview to Times magazine, The founder of India’s wealthiest organisation and the father of India’s richest family, Dhirubhai Ambani, said that he was no Mother Teresa, means being a diehard businessman, his top priority was profit maximisation. Though he was bitterly criticised in the media and society after this blunt statement, but only a hypocrite or liar entrepreneur can condemn the words of Dhirubhai Ambani.
It is simple. A business cannot survive without end users. And business is not a business if it doesn’t make money. It is the harsh reality. To be honest most of the nascent businesses of our country shy away from both these concepts. It might sound strange but the foremost reason of this is that both growth and monetisation are reality checks. They are mirrors to the misplaced romance with their products. An attitude of getting the product absolutely right before jumping in. This might be true in a perfect world, avoiding growth and monetisation alludes you from two of the most important realisations: the need of the product and its business potential.
Does growth lie in your attitude?
Modern businesses are consistently evolving with changing times and scenario, they are redefining their approaches as well as concepts. Today we don't see a conventional marketing team, we come across growth teams. We don't see a marketing VP, we meet their growth hackers. The primary objective of this team is to ensure that the company is growing constantly. The fundamentals may seem simple: growth is not just the proliferation of products, services, and customers, it is the overall growth of a business; high profitability.
In the marketing literature, growth is the prime objective for an organisation that is only achieved by working across the funnel. In essence, it starts with awareness and covers acquisition, activation, retention and even referrals. It includes conventional social media marketing to the geeky product marketing; a holistic approach to the entire system. It is definitely not a question of one trumping the other. It is more of at what stage, should the second wagon join in. And the answer is simple. Whenever there is a semblance of an opportunity.
Businesses don’t make profits, teams make profits
If a startup was a football team, the Business Development team would most certainly be the strikers. their job is to ensure they score when the opportunity presents itself. Though there is no such thing as an important team, the performance of this team often decides the morale in the entire company.
Be it a small startup, a unicorn or a fortune 500 organisation, the growth of a company is and will always be directly proportional to the amount of money coming to the company means total annual revenue. But, high revenue without high profits can create a spell of confusion among the top management. In such a typical situation instead of Sales and BD teams, those who will be questioned first will be heads of General Management, Operations and of course Finance & Accounting. Although the Business Development and Sales are the departments that are usually known as the growth propellers of a business. But, high revenue neither guarantees profit nor it leads an enterprise on a growth track. It is the cumulative team efforts that guarantee cumulative growth: high revenue and high profits. Because businesses don’t make profits, teams make profits.
When all people inside an organisation contribute their best irrespective of their departments and positions, the organisation attains growth. And when an organisation moves on a growth trajectory, it receives a premium over its competitors and eventually the organisations enjoys a better profit margin as well as goodwill in the market. This is not a very typical philosophy rather than it’s a simple business logic that every entrepreneur understands but some of them also practice it.
Growth is monetization and monetization is growth
Growth and monetisation are the two different faces of the same coin, their mutual presence is the prerequisite of survival and sustenance; the absence of any of the two can detract the business from its goals and targets at some point of time. Hence growth and monetisation should go hand in hand. It is obvious that growth should have a head-start since monetisation needs a threshold (which is different for different businesses). Mindless growth and no monetisation only mean burning your own coffers. Products are meant to solve a problem or problems. And if you are solving a problem, there is a monetisation potential. And it's always best to test the different avenues when your growth is in full flow or you might miss out on somebody else. Money is important, however, crude it might sound.