This put up is an introduction to a 5 half collection the place I clarify for frameworks you should align to develop to a $100M+ firm. Subscribe to obtain the remainder of the collection.
I’ve been fortunate to have been a part of constructing, advising, or investing in 40+ tech corporations prior to now 10 years. Some $100M+ wins. Some, full losses. Most find yourself within the center.
One in all my primary observations is that there are specific corporations the place development appears to return simply, like guiding a boulder down hill. These corporations develop regardless of having organizational chaos, not executing the “greatest” development practices, and lacking low hanging fruit. I refer to those corporations as Easy Sailers – slightly effort for plenty of pace.
In different corporations, development feels a lot tougher. It looks like pushing a boulder up hill. Regardless of executing the perfect development practices, selecting the low hanging fruit, and having a fantastic workforce, they battle to develop. I refer to those corporations as Tugboats – loads of effort for little pace.
What’s the distinction between these two kinds of corporations? It is a query I’ve contemplated for a very long time and have pieced collectively a framework to clarify the distinction. The framework has many implications for the way you hunt down development and construct an organization.
Earlier than I clarify the excessive stage framework, we have to begin with what the distinction between these two kinds of corporations isn’t…
It’s Not Simply Nice Product
The “go-to” reply for nearly each query in startups, is “construct a fantastic product.” Each time I hear that reply it feels fully unhappy. Constructing a fantastic product is a bit of the puzzle, however it’s removed from the complete image.
There are nice merchandise that by no means attain $100M+.
There are additionally horrible merchandise by many individuals’s definition that attain far larger than $100M+. For those who’ve ever used Workday, what I’m speaking about. (On the time of this writing, Workday is value $20 billion.)
“Construct a fantastic product” cannot be the reply to most development questions, if the above two statements are true. It’s actually a place to begin, however not the reply.
The issue with the reply of “construct a fantastic product” is that it results in one thing that Andrew Chen and I discuss extensively within the Reforge Growth Series referred to as the Product Death Cycle. The Product Loss of life Cycle was originally coined by David Bland of Precoil.
These are the phases of the product loss of life cycle:
Add New Options: Staff provides new thrilling product options.
Launch: Options are launched with some press.
Spike: A brief time period spike in development happens.
Progress Flattens: Inside weeks the expansion flattens off.
(repeat) Add New Options: Staff finally ends up again the place they began, including new options to get one other spike.
When it comes to a development curve, it seems much like this:
This isn’t the kind of curve we’re on the lookout for. Subscribing to the mantra that each one you need to do is “construct a fantastic product” is submitting your self to an “should you construct, they may come mentality.” Joyful dreaming.
It’s Not Simply Product Market Fit
The second “go-to” reply is product market match. Whereas product market match is a part of the framework, it’s removed from the reply. The difficulty with the product market match mantra is that we’ve got taken it to the intense and developed tunnel imaginative and prescient. Statements like “Product Market match is the one factor that issues” have change into extra frequent. It’s not the one factor that issues.
There are many corporations which have all of the product market match indicators (I’ll discuss these indicators within the subsequent put up) however nonetheless battle to develop, and undoubtedly don’t attain a $100M+ product.
I’m fortunate to be an investor in WonderSchool. Previous to pivoting to WonderSchool, the workforce developed Soldsie, a software to assist manufacturers promote higher on Instagram and Fb. Soldsie has product market match by all measures (stable NPS, good retention, natural development), however regardless of nice efforts, development for Soldsie was gradual, and the corporate was not rising at a venture-backed tempo.
There are tons of comparable examples in startup land. The principle level is: product market match is just not the one factor that issues.
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It’s Positively Not Progress Hacking
One of many different frequent solutions that has emerged is “Progress Hacking.” You’ve gotten a fantastic product, you might have product market match, now all you want is to discover a development hack to grease the expansion wheels. No different time period makes my abdomen churn extra.
Whereas the time period began with good intentions, it has morphed into an idea round hacktics – that there’s a tip, trick, secret, or software that’s going to unlock development in what you are promoting. The issue with hacktics are that they’re brief lived and by no means sustainable.
Earlier than techniques you want a growth process. However earlier than a development course of you want a technique. This framework is all about the way you assemble your technique and place your self for “Easy Sailer” development.
What’s the distinction between Easy Sailer and Tugboat corporations?
It’s not nice product, product/market match, or development hacking. Then what’s it?
The distinction between the $100M+ corporations, and those who battle are those which are capable of make 4 items in a puzzle match:
There are 4 important suits: Market Product Fit, Product Channel Fit, Channel Mannequin Fit, Mannequin Market Fit. I’ll dedicate a put up to every of those suits, together with how one can apply this framework.
There are three extraordinarily vital factors I need to hammer residence by out these posts:
It is advisable discover 4 suits to develop to $100M+ firm in a venture-backed timeframe.
Every of those suits affect one another, so you may’t take into consideration them in isolation.
The suits are all the time evolving/altering/breaking. When that occurs, you may’t merely change one factor, you need to revisit and doubtlessly change all of them.
I’m going to point out you examples of the framework by my very own failures and successes. The collection will roughly go on this order:
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