In this article, Shah references a September 2012 widely-circulated essay by Paul Graham, “Start-ups = Growth”, ingrained with a clear message: startups are about growth. Once a startup stops growing, it gets busy dying. Graham’s essay cemented what Andrew Chen proclaimed in his famous post earlier in 2012 “Growth Hacker Is The New VP Marketing,” that the stakes for gathering huge crowds of users on new hyper-growth platforms was big business.
As traditional venture capital builds, moves to later-stage deals, and requires evidence of strong traction, the thousands of startups are in a desperate race for growth. Some turn immediately to Twitter and Facebook. Investors expect hyper-growth curves, and entrepreneurs must attain this growth at any cost — or die — thereby creating a perverse incentive to chase potentially inorganic growth in the short-term for the chance to survive.
Early-stage startups will benefit from thinking about growth from an engineering or marketing perspective to lock-in organic behavior. Starts-ups must think about these questions: “have users organically found the product?”, “what are users saying to their friends and acquaintances about the product?” and, “what is unique about the model that could make this scale to tens of millions of users naturally?”.
Founders and investors must understand that the majority of start-ups require more time to chart a path and that investors should be increasing selectivity in choosing which teams and products deserve more swings at bat.
Shah says it may be time for everyone to ask some fundamental questions:
“Do consumers have any time in the day and attention to use an infinite supply apps?”
“How can we be more honest about whether a product is genuinely being used and organically shared?”
“When is it time to concede a product just isn’t what the market needs?”
“Will at least some investors be willing to have more conviction around earlier-stage products and back them based more on art and conviction, rather than pure metrics?”
How can these questions be applied to your business?