Go Big or Go Home!
Every ambitious founder has that fear deep inside: their growing company could very well die. Not in a year - it could die tomorrow. Use that fear, that sense that it could all disappear. Keep pushing forward and riding the wave. Don’t overthink things or try to plan perfectly.Growth may start artificially, with your friends and close contacts, but your goal is to make your startup grow organically. And the only way to grow fast is to push so much and so hard that it feels almost impossible to keep up.
The founders I work with start to eventually hate me because I repeat it so much: a startup is entirely defined by its growth. A startup isn’t defined by being on the internet. A startup isn’t defined by concentrating on technology. The easiest definition of a startup is simply the one given by Paul Graham a few years ago: startup = growth.
A startup is impressive because it achieves a level of growth that is practically impossible to believe.
If you look at Uber, you aren’t impressed by its technology. You’re impressed because they’re doubling their number of drivers every six months. You’re impressed because their revenue growth is hitting percentages that you wouldn’t think possible. The amount of growth that you see in a successful startup over a short period of time is completely outside of the norm.
That’s why entrepreneurs have to be obsessed with growth. Ask yourself, “Is what I’m doing helping my growth?” If yes, keep doing it. If it’s not, stop and find something that will help growth.
That’s not a comfortable situation to be in. Growth hurts. It can’t be planned, it doesn’t follow a roadmap. You’re dreaming if you think that you can control it.
That’s why you shouldn’t evaluate a startup based upon how it looks from the outside. If you really want to see how a startup is doing, go take a look at its founders. If they’re completely stressed, late all the time, and seem to be just barely keeping their heads above water? That’s a good startup. All founders struggle when they’re growing at a pace that breaks all the rules.
Growth can work in two directions.
Because it’s so powerful, it will have oversized effects no matter what direction it is going. If you’re growing, it can magically make all the other problems in your company disappear. No investor is bothering an entrepreneur who is demonstrating strong growth. But if that growth starts to slow down…if six months later you miss a milestone…well, just go look at what’s been going on lately at Zenefits. People get fired, heads roll, and everyone starts grasping for solutions. All of a sudden, everything in your company is wrong, there are problems in every department, and it’s like watching a train wreck. When growth stops, there is no one around to protect you.
But in startups, you have to accept this situation, because growth is the only way to create real value. That value is the ultimate validation of everything that you’re doing.
No matter what, there will come a day when the growth stops.
If you have a lot of early success, you can think it will go on forever. But growth comes in a series of levels. We like to think about that perfect exponential graph of growth, curving upward to infinity and beyond! But the reality is that there are periods of growth and there are plateaus. Those plateaus are when you’re going to be really evaluated on the inner workings of the company. You have to be prepared for that, and for the scrutiny that comes with slowing growth.
To properly manage growth, you need to keep looking forward and realize that growth is created. It’s not something that just happens. You don’t just put together a perfect product, give it to two people, and then wait for the exponential growth to roll in. After all, people are lazy. Think about how many products you use, but that you never tell anyone about. And think about everything that you love and tell people about, but that no one uses. That’s exactly why you have to go out and chase down growth.
You can have different strategies for chasing down growth at the beginning and then managing it when you’ve reached the tipping point.
When I look at some of our best companies at The Family, the ones who are growing quickly, I can find very different strategies that are dictated by the product. Save, Trusk, Agricool, these are all companies that are growing quickly but that have to adapt to different realities based upon their industries and their goals.
But what they have in common is the capacity to dream. Why has Apple grown into the largest company on the planet? It’s because they see themselves as fueled by dreams. When you talk to Agricool, what is their goal? To change the way everyone eats. If you ask Damien Morin at Save about their mission, it’s not to replace cracked screens on smartphones — he wants to save every device that exists. That mindset is what allows you to run along with your growth as things take off. If that’s not your ambition, then growth will only be scary for you — it will never be scary fun.
The only way to grow fast is to push so much and so hard that it seems to be literally impossible.
No one will tell you this, but every founder has that fear deep inside when they realize that their growing company could very well die. And not in five years or in a year. The company could die tomorrow. Great founders use that fear and that knowledge that it could all disappear to keep pushing and ride the wave.
That’s why you can’t overthink things or try to plan them perfectly. If you say that something is going to take six months, it’ll take longer than that. And maybe it could have happened faster if you had simply said, “This is what we’re going to do,” without putting a timeframe on it. Growing fast can’t happen on a timeline, it can only happen in terms of milestones. Those milestones should be KPI-based, with no calendar for when it will happen.
If you say, “We’re going to get out of beta in 3 months,” how does that help you? It makes much more sense to simply say, “We’re going to get out of beta as soon as we hit 10,000 users.” And then you try to reach 10,000 users as quickly as possible. That’s a mindset and a milestone that can adapt to growth.
Besides you as the entrepreneur, who is scared of growth? In Europe, investors.
Investors in Europe are horrified with the idea of spending and losing money. So you need to learn to ignore them, and only listen to those few people who have proven to be knowledgeable enough to encourage rapid growth.
Understanding your growth and your internal milestones is what lets you know when you’re in a position to ignore those investors who start to worry. Being an entrepreneur is about correctly evaluating what’s going on today and how that is taking your growth forward.
This situation is driven by the fact that the biggest problem in startups is a misalignment between each stakeholder’s level of risk. Your banker’s looking for a risk level of zero, your intern’s risk level is infinite (because they don’t care), your investor’s risk level is a bit higher than your banker’s but not by much, and your risk level as an entrepreneur is based upon your fear of death. And having that fear of death is a good thing, because it pushes you to do things that people would otherwise think impossible, those things that their own risk levels won’t allow them to do.
Growth is hard but short-term growth is more obvious.
There are tons of growth hacking tips out there, they all need to be taken with a grain of salt. Growth hacking is like a chemical reaction — if you’re doing it without having traction and organic growth already, it won’t really help you. You need the combination of elements to really make things heat up.
Manual growth has its limits. When you’ve got all of your friends on board, when your Facebook friends are all in, when you’ve got to reach further and scale outwards, that’s when you move toward growth hacking, automating processes, marketing, that sort of thing. And the only way to know when you’ve gotten to that level is by tracking your metrics.
All of your metric goals should be absolute.
Don’t compare yourself to anyone else. If you have 1.5% conversion, and everyone else in the industry has 0.75% conversion, you shouldn’t think that you’re better than the rest, so things are good. You should be asking yourself how you can raise your 1.5% to 1.6%, and then to 1.7%, and so on.
Absolute metrics are what allow you to push through to the impossible. If you relativize your goals and start comparing yourself to others, you either become depressed (because you aren’t doing as well as they are) or you become complacent (because you’re doing better than them, so it’s all good).
Do the “up or out”.
Your first week, you launch, and you look at your users, your conversation rate, whatever metrics are most important for you. And you try to push those metrics, week over week, just a little bit higher. You know what happens: those small but absolute numbers, growing steadily each week, end up becoming very large numbers.
And don’t forget that your ultimate life metric is revenue: whatever you’re tracking to measure your growth, revenue is the most important one. Forget the idea that you’re concentrating on growing your user base, and you’ll worry about revenue later. It doesn’t make sense. Stop it.
In the end, deciding whether you want to found a startup comes down to a question of whether or not you’re excited by the insanity aspect of growth.
And one way that you can decide if it’s right for you is by giving yourself the Achilles test. When Achilles was a child, his mother saw that he would either live in obscure happiness, or he would die young with glory. When the time came to decide whether or not to go off to the Trojan War, Achilles had to decide between those two fates. He could live at home, have children and grandchildren and then fade into obscurity. But he went the opposite way: he chose glory, died young, but his name has lived on for thousands of years.
Today, we know that there are a lot of ways in this world to be happy and make money that don’t involve trying to find success as a startup. You have a choice between two paths. You have to recognize those paths and make the choice willingly. It’s not necessarily forever — you can choose glory now and then change your mind in five years. But know this: launching a startup is on the path to glory. It’s hard, it’s difficult, it’s dangerous, and it’s not for everyone. You’re the only one who decides if it’s right for you.
In a startup, growing is about doing things that seem impossible, discovering secrets about your market that no one else knows about because no one has pushed so hard.
Growth should be your obsessionStartup equals growth. For everything you do, wonder first “Will it make me grow?” If yes, push harder; if no, stop it - now. You have to build your growth, it won’t be handed to you on a golden platter.
It’s not comfortableGrowth hurts: it cannot be planned, decisions cannot be made in advance, you’ll always be late and have no choice but to work harder and harder. Growth has a very personal cost: it costs your time, your mental and physical health. Do not expect anything other than chaos.
Growth creates valueGrowth is the only way to build value and the only thing that can solve any problem in your company.
Growth gives you controlWho runs a startup? If it’s growing, it’s the entrepreneur; if it’s not, it’s the investors. If you don’t grow, there is no one to protect you - that’s the deal. The more you understand your growth, the more you will be in charge of your company because no one will want to stop the train.
Don’t make plansPlans kill growth, because people always believe their plan. If you plan to do something within 6 months, you’ll actually do it in 6 months or more. Never think in terms of timeline, think in terms of milestones, with KPI-based objectives, not time-based objectives. Your only obsession about a timeline should be to reduce it.
Learn to ignore your investorsInvestors are afraid of growth because it costs money: European funds are small, they have little money and they are not used to losing a lot very fast in a growth situation.
Don’t be afraid of deathStartups’ biggest problem is the difference between stakeholders when it comes to their risk tolerance level. The fear of death is a great danger: it keeps you from being bold. You’ll recognize it when you’ll begin to think twice before doing something. Go against that. It is part of the job to fail or go bankrupt.
Go for the obviousForget any big plan for the first 1000 customers and focus on doing things manually in order to learn. Short-term growth is manual. Leverage your friends and your entire community as a beginning. Be dead simple and be good at it. Repetition is key - it is very hard to get something into people’s minds. Then you’ll find the limits of manual growth and start using automation and growth hacking solutions, developing softwares and marketing.
Think MetricsBenchmarking is for losers. Do not compare yourself to others, compare to yourself one week before. Use the “Up or Out” methodology: look at your “natural” metrics on the first week and then make each of them grow, pushing up from whatever the starting level. Never add metric goals that are not relative.
There are 3 kinds of metrics:
- Life metric: it is the very metric that tells if you are alive or not. In 99% of cases, the life metric is revenue. Growth obviously means growing revenues and more revenues equal more means for growth.
- Optimization metrics: they are key metrics that fuel the Life metric.
- Vanity metrics: they are useless as they have no impact on your life metric.
For a social network for instance, the number of subscribers is a vanity metric: what counts for this kind of project is not the acquisition but the retention rate, so the number of daily active users is an important optimization metric.
Measure by weekIf you keep doing small things in a tight timeframe, you’ll have big effects on the long run. If you try to do big things on a large timeframe, you’ll get depressed, because you’ll never know if what you did worked (or not) and if you are successful (or not).
And please: growth rates must be calculated week over week in absolute numbers, not cumulative numbers.
Be ambitious as a teamEveryone in the team must be aware of the goals and feel concerned about reaching them. Celebrate the right things and similarly, share desperation: communicate internally about every piece of news, be it good or bad. Create an automatic email sending the numbers to everyone in the team. Be harsh. Be clear about what success means and what failure means, on the basis of your KPI.
Choose your sideApply the Achilles dilemma to yourself: happiness or glory. Glory means doing something that matters, not being mainstream famous. The glory path is hard: everything you’ll do can fail at any moment. At the same time, the happiness path would be boring for a lot of entrepreneurs. There are as many kinds of entrepreneurs as there are ways of life and ambitions. Make a true decision, choose which kind of entrepreneur you want to be. It is a one-way ticket.
Grow or dieAt every step, you must find a new solution to reach the next level of growth. And if at every step you take you are not at risk of dying, it means that you are not growing fast enough.
Articles to go deeper
Andrew Chen, “Growth is a System, Not a Bag of Tricks”
@andrewchen, February 2016
Nicolas Colin, “Notes on Amazon (part 2)”
The Family Papers, January 2016
Nicolas Colin, “Notes on Amazon (part 1)”
The Family Papers, January 2016
Laetitia Vitaud, “Save: How to Build a Service Empire At Lightning Speed”
Kima Ventures, January 2016
Nicolas Colin, “Low-Risk, High Reward: Why Venture Capital Strives in the Digital World”
The Family Papers, November 2015
Bill Gurley, “How to Miss By a Mile: An Alternative Look at Uber’s Potential Market Size”
Above the Crowd, July 2014
Eric Kutcher, Olivia Nottebohm, and Kara Sprague, “Grow Fast or Die Slow”
McKinsey Global Institute, April 2014
Marcus Wohlsen, “What Uber Will Do With All That Money From Google”
Wired, January 2014
Babak Nivi, “No Tradeoff Between Quality and Scale”
Venture Hacks, February 2013
Paul Graham, “Startup = Growth”
Essays, September 2012
W. Brian Arthur, “Increasing Returns and the New World of Business”
Harvard Business Review, July 1996
We told you, they lived it!
Damien Morin, CEO @ Save.co
Damien Morin started Save.co while he was still a student, opening a store to repair phones. He met Cyril, his co-founder who came in to repair his wife’s phone. In less than two years, Damien turned his store into a scalable business model. He has hired more than 600 people, opened more than 100 corners in 10 countries across Europe, and raised $17m with Save.co.