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Pete - 06 / 03 / 2024
Pete - 06 / 03 / 2024

Why Gradual Incremental Growth Can Be A Huge Win For Investors

By Guy Remond with David Hunter

Fast growth is often at the very core of entrepreneurship. Founders want to achieve it. Investors look for it in businesses they’re going to back. And for us here at EHE Ventures, it has been a running theme throughout our podcasts and blogs!

But could slow, incremental growth also deliver huge wins for you as an investor?

Let’s find out.

Shot Scope’s journey to growth

Recently on Fast Growth Funding, I was joined by David Hunter, the CEO of Shot Scope Technologies. A team made up of technology experts and golfers, Shot Scope is on a mission to improve the way both amateur and professional golfers collect and analyse statistics from their games.

What strikes me about this company is the fact that it has had a rather interesting journey to growth. 

So far, it has secured £2.7m in Series A funding, now owns 20 per cent of the UK golf tech market, and increased the user base of its patented performance tracking technology by over 80 per cent within six months. 

However, its growth journey has been anything but linear.

Incremental growth vs massive, quick wins

David: “We got Version 1 of our product to market really quickly and totally changed it for Version 2. Version 2 did well in the UK, but it wasn’t until our Version 3 came along that we knew that we could grow and scale. The Version 3 was a nice product – a GPS watch that tracks all your games automatically – but it still didn’t have the bells and whistles of some of our competitors. So we always knew we were going to have to evolve and grow. 

Our tech was so sophisticated that it took us four years to fully refine it. And that was just one product. We still had to expand to cover every segment and every price point of our niche within golfing.

Everybody wants to think that there’s this big “hurrah” moment, but there are loads of moments along the way – good and bad. If you just keep moving the needle and making incremental changes, you’ll get there.”

After building and improving the original product, Shot Scope now has up to 15 different products packed with features to help golfers of all abilities enjoy the game. There’s something to be said for that kind of progression.

Tech is a bit like the music industry in the sense that there will always be one-hit wonders. Startups that display initial success only to taper off without any other major wins.

In the same way that record labels want to see multiple hit singles, albums and money rolling in, as an investor, you’re not just looking for a massive quick win at the start. You want to see the progression – real incremental growth – even though this may not always play out within a short period. 

Prioritising long-term potential over short-term gains can lead to more stable returns, as companies that show consistent growth are often better positioned to adapt to market changes and challenges. 

Plus, you’ll be mitigating the risk of investing in businesses that may initially appear promising, but lack the substance or strategic vision to maintain their success.

However, recognising a startup’s potential for long-term growth is only one side of the coin. The other equally critical aspect is linked to the founders themselves. How resilient are they?

If you’ve followed any of our previous blogs, you’ll know that the first thing we always look at when vetting startups, is the team behind the idea. What are their skills and storied histories? What unique experiences do they have that might spell potential?

The need for founders to hustle

One common misconception within the founder community is that if an entrepreneur puts out a good idea, investors will come running with money. However, it never works that way. Founders have to roll up their sleeves and get their hands dirty to secure funding. This could mean applying for grants and seeking multiple financing options to get things moving. 

Entrepreneurs who keep their ears to the ground and put in considerable time and effort to get things moving are far more likely to secure investment than those who don’t. 

From an investor’s point of view, founders who show this kind of tenacity, grit and resilience generally present more attractive investment opportunities because there’s hard proof that the founder will be hands-on when it comes to driving business growth.

David sums this up brilliantly.

David: “In our first year, we won over eight different grants totalling £250,000. It was hard work and it was time-consuming. But these grants laid the foundation for when we started seeking investment itself. 

Investors always want to see some skin in the game. So far, we’ve gotten two and a half million pounds in grants. If you’re resourceful and fortunate enough to win some of these grants, you can get over the line.

But you have a huge responsibility to take that invested capital and use it to get the business to the next stage.”

Final thoughts

In a nutshell, while fast growth is important for any startup, the ultimate goal is to build a solid, sustainable business that can keep growing over time. For investors, this means looking for companies that are in it for the long haul and not just a flash in the pan.

To keep up with Shot Scope’s journey, visit their website today or follow them on LinkedIn.

If you’d also like to learn more about our new EIS-qualified fund for UK early-stage and growth AI investments, register your interest here.

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