
Before Growth - firloop
http://blog.samaltman.com/before-growth
======
beat
This reminds me of pg's comments about "playing house". The _appearance_ of a
startup is more important than the _reality_ of a startup, for founders whose
core drive is to "be a startup founder", not "create this product the world
desperately needs so maybe it will stop haunting my dreams".

I've met founders like this, recently. They're building some sort of social
app that does something no one needs and no one would pay for. Maybe I'm being
dense and they're actually geniuses, but I don't think so. Most startups fail,
and I think a lot of that is because a lot of startups are really stupid.
They're "solving" worthless non-problems because the founders aren't doing the
hard work of finding real, valuable problems to solve.

Building a great product is really hard. And it can't all be done completely
lean - at some point, you need to envision something so profound that people
don't realize how much they need it. You don't just write Hello World, charge
a buck, growth hack, and brag about how you got two bucks for it the next
week. As Henry Ford said, if he'd asked customers what they wanted, they'd
have said faster horses. Don't build a faster horse. You won't be great that
way.

~~~
gxs
As an aside, reading posts like this makes me feel a little better.

I'm 31, have a great job etc., but have always wanted to start a company.

The problem is, I've never encountered a problem big enough that would want me
to do this and rather than start a company for the hell of it, I've just
stayed put.

What is the right move in this scenario? Start a shitty company, or keep the
nice job and potentially regret never starting a company?

Viewed from this perspective, it's not as clear.

~~~
beat
I'm in that "I need to build this so it stops haunting my dreams" category.
And I'm a lot older than you. After 20 years in the industry, I kept having
the same problem over and over, at job after job. One night, I thought "Man, I
wish there was a product for this, but no one makes it." The I thought, "Hey,
I could make this! And lots of people have this problem, and it's a really
expensive problem, so I could make money at it!"

Three years, a lot of personal cost, false starts, finding co-founders, and
other headaches later, and I'm finally getting to where this year, it should
start making money. I can't even begin to describe what a difficult experience
it's been. Someone once told me the only emotions founders experience are
elation and terror. What they didn't tell me is that they are often at the
same time, and often for the same reason, and sometimes are indistinguishable
from one another.

I'm a founder because I couldn't live with myself if I wasn't. Doesn't mean
it's easy, or it's going well all the time.

So that being said... if you want to be a founder, and you're a good software
engineer (I'm assuming you're tech, that's why you're here), don't even bother
coming up with an idea! Instead, go looking for experienced business people
who have a real business idea and the knowledge to pull it off - except for
the technical skill. Become their tech co-founder. Because there are so many
of them, and so few of us, you can afford to be choosy.

If it's someone who has successfully started businesses before, all the
better! There are lots of really smart, driven, reliable business people out
there with great ideas, but without the technical skill to implement. Find
one, and make something great.

~~~
bglazer
Hey, I just wanted to say that I checked out your company, and I think you
have a very compelling product. Unfortunately, I'm not in a position to buy it
(junior engineer at a massive corp). Instead I just wanted to wish you luck!

~~~
beat
I have a very compelling _idea_ , and a very compelling _problem_. And a
product that is not yet sales-ready yet. But we're getting there. It's been in
a fundamental rewrite mode since August (what I thought was the beta was
actually the alpha), and I've since added two co-founders so I'm not doing it
alone anymore - deeply experienced enterprise engineers like me who have felt
the pain that we're trying to solve viscerally.

But yes, thanks for the confidence! :)

The best part of it is when I talk to the target users about it and their eyes
light up and they get _so excited_. The problem is huge, and the current
solutions are terrible. If we can't make money at this, it's an execution
problem, not a market problem.

~~~
paulmd
How is your product different from etckeeper + flyway + source control?

~~~
beat
First and foremost, it monitors the real world, not the version control
system. It sees things as they are, not as they're supposed to be. It detects
manual, unversioned changes. It detects changes from automation, or from
intrusion. It detects things that can't be versioned, like reboots or cert
expirations.

Second, it is minimally invasive. You don't have to change your process in
order to use it.

Third, it shows relationships between systems. An application isn't just
source code. It's compiled binaries, OS patches, user security, databases,
firewalls, message queues, apis, and more. Here's a common failure pattern -
System A changes, System B breaks. System A might actually be perfectly fine
and correct, and B as well, but the _relationship_ between A and B is broken.
Change the database schema, and the app can no longer read it. Change the dns,
and the UI can no longer find the API. For any decently complex application,
the potential sources of failure are in the thousands, and potential
interactions effectively infinite. Now scale this up to the enterprise, to
organizations so large that your app can be broken by departments you didn't
know existed...

~~~
subway
Does it detect when you have a busted marketing site?

[https://congruence.io](https://congruence.io)

~~~
beat
Thanks. It's a known problem... we're currently in product work and haven't
been dealing with marketing at all. It's just a cert problem -
[http://congruence.io](http://congruence.io) still works.

And yes, once it's working, it will be able to detect such issues.

------
Aqueous
I don't really understand why they need to grow quickly. You only need to grow
quickly if you take millions of dollars and need to distribute a profit to
your investors before too long.

Whatever happened to growing slowly, proving the revenue stream before you
throw millions of dollars at something? Why is that such a bad thing?

I understand from a VC's point of view why it's a bad thing, and that's the
point of view which YC and other incubators are coming from. But why is it a
bad thing for the entrepeneurs?

Taking time to consider what you're building is important. Taking time to grow
is also important.

~~~
WalterSear
>I don't really understand why they need to grow quickly. You only need to
grow quickly if you take millions of dollars and need to distribute a profit
to your investors before too long.

You need to grow quickly because the world is a big place and technology
concepts unfold more or less sequentially, with each iteration building on the
past.

As a result, the world is full of people who are going to have similar ideas
to you and similar opportunities to take advantage of them, around the time
you do, and whoever gets established first will get to take most, if not
almost all, of the pie.

~~~
Aqueous
I guess I get that but the marketplace is also a big place and often times
there is room for more than one player. Apple and Samsung, Gillette and
Schick, Pepsi and Coke. You don't need to totally wipe out competition in
order to be a successful company. Furthermore, when there are totalizing
effects, it's because the technology benefitted from massive built-in network
effects (i.e. Facebook, Uber.) Many (possibly even most) start-ups don't rely
on those.

~~~
WalterSear
> Apple and Samsung, Gillette and Schick, Pepsi and Coke.

None of which got started during the current technology cycle.

>Many (possibly even most) start-ups don't rely on those.

I disagree. In fact, IMHO, the overwhelming majority of startups benefit from
organic methods of growth that come from word-of-mouth and reputation. Any
startup with more than one customer, pretty much. Owning the market means
owning that, in your respective field of business.

~~~
Aqueous
> None of which got started during the current technology cycle.

Then I need to understand why the current technology cycle is fundamentally,
essentially different from previous ones. A business needed to bring in more
money than it spent 30 years ago just the same as it does today.

> I disagree. In fact, IMHO, the overwhelming majority of startups benefit
> from organic methods of growth that come from word-of-mouth and reputation.
> Any startup with more than one customer, pretty much. Owning the market
> means owning that, in your respective field of business.

Start-ups rely on networking but by network effects I'm referring to a very
specific phenemenon whereby the value of the product itself increases with
each user / car driver / payee / node, etc. This in turn leads to this kind of
run-away virality that the Facebooks and Twitters and Ubers of the world
experienced. Plenty of start-ups achieve virality in other ways, merely by
selling the product over and over to people, and having people sell it to each
other through as you point out word-of-mouth. But in the case of network
effects that process is compounded exponentially, making it very difficult to
scale (without capital) because often times revenue lags behind user growth.

~~~
WalterSear
> Then I need to understand why the current technology cycle is fundamentally,
> essentially different from previous ones. A business needed to bring in more
> money than it spent 30 years ago just the same as it does today.

The barriers to entry and growth are radically different. As a result, there
is more competition and faster growth at all company scales. So businesses
have to scale their velocity accordingly.

>Start-ups rely on networking but by network effects I'm referring to a very
specific phenemenon

Which is moot: the competitive effects of brand awareness and economies of
scale don't disappear because one chooses not to consider them.

------
hitekker
>I think the right initial metric is “do any users love our product so much
they spontaneously tell other people to use it?” Until that’s a “yes”,
founders are generally better off focusing on this instead of a growth target.

I have a warning for future, young developers: do NOT join a startup that
hasn't found product/market fit, and isn't trying, with all of its might, to
find that product/market fit. And when I say, by all of its might, I mean
companies that product/market fit isn't the first and foremost goal of the
startup.

This is really hard to determine from the outside.

For example, a friend of mine is working in a well-funded, post series A
startup that just declared internally its biggest target was a billion dollars
of products shipped by the end of the fiscal year. The team is smart, the
founders are passionate, and they've been judicious with their funding.

Problem is that the CEO herself admitted that they don't yet have
product/market fit. Which is to say their "guiding light" metric is a lagging
indicator, i.e. it measures that tail-end of their efforts, and certainly not
how much customers love them (and are willing to pay). It's the equivalent of
early Facebook using advertising revenue or page views as their growth target
instead of monthly active users.

As Sam Altman points out, everything they do will be "hacking" or, as PG puts
it, doing tricks that are not sustainable for a real, billion dollar company,
in attempts to achieve that misleading number.

At least from what she told me, the most senior engineer said that this isn't
bad: the engineers will focus on product/market fit and the sales/marketing
teams will focus on growth. Of course, she didn't say that, in a conflict
between the fake growth target and product/market fit, the fake growth target
always wins. Even now, I'm trying to pull my friend out, before the mental
gymnastics set in.

Don't be fooled. A startup needs a real, sometimes small, star in the sky to
navigate churning waters. A ship that chases the moon is a ship that will soon
be sinking.

~~~
magicmu
This is absolutely true. I work for a YC-backed startup and sometimes felt
like that "star in the sky" wasn't there, and worried that my lack of faith
was disturbing (to quote movies). Thankfully, the founders here are open
enough that I was able to voice my concerns, and it turns out that I had a
totally incorrect idea of the product/market fit that they were/are aiming
for. As a core member of the dev team, this could have been a potentially
catastrophic misunderstanding. So yeah, everyone being on the same page and
seeing that same goal is really crucial.

------
magicmu
> I think the right initial metric is “do any users love our product so much
> they spontaneously tell other people to use it?” Until that’s a “yes”,
> founders are generally better off focusing on this instead of a growth
> target.

It all comes back to this. I was listening Aaron Harris' interview with
Digital Ocean's Mitch Wainer on Startup School Radio the other day (phenomenal
podcast). Wainer mentioned how people actually _love_ Digital Ocean, and how
rare it is for that word in particular to be paired with the name of a
company. I think it's said so often that it can easily be glossed over, but
that word is not chosen lightly. Having a product users actually love is
extremely difficult, and extremely rewarding.

~~~
blizkreeg
I've wondered what about Digital Ocean users love so much (I'm a customer)?
They are not the first to offer cloud housting at cheap prices (I've used
slicehost, EY before they became pricey in the past).

Is it price? Is it ease of setup? Something else?

~~~
rgbrgb
What appealed to me initially was that they were charging the same as the
shady ultra cheap VPS providers but had an actual brand I could trust and were
actively developing software to make managing their boxes easier. When I first
saw them I was in college, so very price sensitive. They also have had a
really effective content strategy from the start [0]. The tutorials are mostly
on open source stuff you can do on any infrastructure provider, but the
quality is pretty good and reinforces the trustworthiness of the brand.

[0]: [https://www.digitalocean.com/community/get-paid-to-
write](https://www.digitalocean.com/community/get-paid-to-write)

------
pquerna
_I think the right initial metric is “do any users love our product so much
they spontaneously tell other people to use it?”_

Many larger companies use "Net Promoter Score", as a way of telling this:

[https://en.wikipedia.org/wiki/Net_Promoter](https://en.wikipedia.org/wiki/Net_Promoter)

Of course, like Agile, there are Consultants, a methodology and books, but
there is some truth in asking your customers if they would promote you to
another person.

------
adamb
Perhaps I'm the only one that sees this, but this essay appears to be a
_significant_ departure from the YC rhetoric I've observed in the past few
years. Every time I've heard retention discussed (at YC) in the context of
growth, it's cast as something you address when your growth has stalled. Not,
as this essay would lead you to believe, a _prerequisite_ of growth itself.

This essay, while it discusses a really important idea, comes across as
saying: "Foolish, fashion-focused founders! Clearly retention comes first! We
would never imply that you should focus on growth before your product had
adequate retention!"

But that's exactly what I've seen YC partners do. Recommend that companies
focus on growth, because that's what YC's definition of a startup is: a
company that grows very quickly. Having seen both sides of the curtain, the
essay leaves me with a greasy, queasy feeling.

Am I missing something here?

Sam, are you changing your standing advice from "focus on growth" to something
else? If that's what this post signals, please take ownership of the change
and spell it out.

It's poor form to imply that misguided founders (and their devotion to a fad)
are driving the growth zealot craze when you've had a hand on the wheel for
years.

~~~
sama
Our motto is "Make something people want!" If that's not a statement about
retention, I'm not sure what would be.

And a startup needs to grow quickly. It's not an either/or--at most, it's a
sequencing issue.

Most founders fail because they don't make a product product some users love,
or they never make a product at all. Others fail because they don't figure out
how to grow fast.

But the best way to grow fast is to have a product that's so good people tell
their friends about it.

All I'm saying is that I think things have shifted--perhaps because we've
given bad advice, but also probably for lots of other reasons--and founders
should course correct.

~~~
adamb
It's definitely a sequencing issue.

Glad you mention the "make something people want" motto :). I've recently
realized that it's actually wrong. Well, backwards.

A more instructive formulation is: "find something people want and make it."
Better to acknowledge the value of the search (and confidence in the finding)
before encouraging the making.

I have seen many founders struggle to understand when the time to grow is.
Pressure to raise deepens the struggle. On the topic of growth vs retention,
of the hundreds of founders I have met or read about, I have been most
inspired by the actions of Ooshma Garg (of Gobble). The quality of her service
is second to none. She's the only founder I've ever met that has completely
shut down her product because it wasn't good enough, only to reboot it to
better quality, retention, sales, and growth than ever before.

In my experience (flawed and narrow as it is), the best way to course correct
is to issue a recall. Treat bad advice like bad goods. Post the criteria where
those affected will recognize themselves and make needed reparations.

As a community, we need to better celebrate founders that are doing it right.
Not mock those of us still figuring it out.

If YC wants to get the word out about prioritizing product market fit above
growth, it should elevate Ooshma's perspective, along with other founders that
have made similar gut-wrenching decisions to invest heavily in retention while
sacrificing weekly growth targets.

Overall I'm glad you wrote and posted the essay. And I appreciate any humility
you may have felt while drafting it.

~~~
Gatsky
In general I don't agree. Maybe in a B2B setting you can do this. Do you have
an example where this has worked? I can only think of many examples where it
wouldn't have worked. Do I want a website where I can make friends with my
real friends? No, what for, we'll just hang out in real life? Do I want a
service where I can post 140 character messages to the world? Only 140
characters? What's the point of that? Do I want to be able to stay in other
people's houses while they are away? No way, that's crazy, nobody would go for
that over a hotel... (I happily use all these services now, of course).

~~~
adamb
There's always going to be a perspective that makes a business sound crazy
before it's mainstream. That said, I used many of those products when they
were very, very young and I did want what they were building. In many cases,
those businesses came after others that lit the way but somehow came up short.

My point isn't that people should be asking for what you're building. My point
is that you should think about how you'd know if people want it before you
worry about making it.

That said, I regret adding that comment here, as it detracts from my larger
point about encouraging YC to use more constructive ways to help their
founders course correct.

------
ivankirigin
It seems like there are a million different ways to say the same thing: early
on focus on retention.

You can get this from your data at sufficient scale. You can get it from
surveys like NPS. You can get it from talking to customers.

One problem I have with the word "growth" is that it implies top level
acquisition. A better definition would be hitting your goals. If you want to
grow your retained userbase, then getting top level acquisition isn't actually
hitting your goal.

~~~
solve
Retention and NPS seem orthogonal.

~~~
ivankirigin
Nope. NPS is a measure of satisfaction. You care about the word of mouth
component, but it isn't measuring something different than retention.

~~~
solve
Nope. They're literally measuring two different things, return rates vs "would
tell a friend" rates.

Whether those two happen to coincide is quite product-dependent. Finding
examples where they significantly diverge is trivial.

~~~
tyre
A recent example of this is Peach.

Did people want to tell their friends? Yes, but not because they loved the
product. Because they wanted to be seen as cutting edge.

Most of the product hunt/tech crunch circle jerk is stuff like this. Lots of
fluff with short-term spikes but little long term retention because the
product doesn't solve a real need.

------
applecore
This is closely related to Aristotle's concept of potentiality[1] and the
active intellect. More succinctly, a startup must build up the potential
energy of its product prior to transforming it into the kinetic energy of
growth.

[1]:
[https://en.wikipedia.org/wiki/Potentiality_and_actuality](https://en.wikipedia.org/wiki/Potentiality_and_actuality)

~~~
erikpukinskis
I like this. I am also reminded of something I read about agriculture and food
forests. The idea was that all land "wants" to return to its forest state, and
that traditional agriculture requires constant energy inputs to hold the land
in a raw, tilled state that can be quickly planted. The alternative is
planting multiple compatible canopies—an edible forest—so it can stably
sustain itself without inputs.

I think something similar happens socially... Whenever you diverge from the
standard model of doing things (as startups do) it requires a massive amount
of energy to stay in that raw state. Markets, employees, everything "wants" to
pull you back to the typical way of doing things. The forest of the status quo
fights like hell to grow back.

So ideally what you want to do is clear a little land and ASAP plant a
complete ecology that can fill that little space. I think this is where I get
to the potential energy.... If you are going to have to wait a long time to
plant all the different parts of the ecology, you need more potential energy
to hold the land open. If you are going to plant a balanced ecology right
away, you can get away with less energy.

Anyway. Mixed metaphors but I appreciate the opportunity to mix in your idea
to things I've been thinking about.

------
minimaxir
> A startup that prematurely targets a growth goal often ends up making a
> nebulous product that some users sort of like and papering over this with
> ‘growth hacking’. That sort of works—at least, it will fool investors for
> awhile until they start digging into retention numbers—but eventually the
> music stops.

But by then, the startup has already _won_. They already got the funding
thanks to their sleazy marketing, and the social validation/connections that
comes with it.

The essay doesn't contradict the "it is easier to ask for forgiveness than
permission" idiom, unfortunately.

~~~
salmonet
>But by then, the startup has already won. They already got the funding thanks
to their sleazy marketing, and the social validation/connections that comes
with it.

Only if getting seed money and failing in 18 months is their idea of winning.
I have a hard time seeing how this is an ideal outcome in either the short or
long term for anyone.

------
gustaf
This is a great post. This is the by far most common miss-understanding I get
from new startups. People are far too confident their product have reached
product-market-fit before that is actually true - often making this claim with
very little data.

I've seen many VC's who are not data-literate enough to be able to understand
the difference between measuring product value and growth without substance.

------
andrewmcwatters
Isn't Y-Combinator's whole thing "Make something people want."? That's a
rather succinct and meaningful statement on its own. A very powerful one that
should be held above perhaps all others.

I'm sure that whatever your business practices are, after boiling everything
away, you should be doing this above all things. An article like this suggests
perhaps some sizable amount, or many organizations are losing sight of the
way.

------
danieltillett
The alternative to this is focus on getting your customers to pay you in
advance for your product. Not only will this tell you if your customers really
love your product, but it will provide you with all the cash you need to grow
as fast as you want.

The downside is very few products are that loved that customers will pay for
12 months in advance.

------
hammock
Sam is talking about the importance of watching _leading indicators_ when
there is a good bit of time between your present actions and future
performance.

If you are relying on your users to drive growth, an easy-to-measure proxy of
"do any users love our product so much they spontaneously tell other people to
use it?" is Net Promoter Score[1], or the difference between the % of users
who would recommend you, and those who would not.

There are other (perhaps non SV startup) businesses that dont rely on users to
drive growth. For example, if you rely heavily on distribution arrangements or
retail placement. In that case you might want to look at other metrics that
are leading indicators of growth.

[1][https://en.wikipedia.org/wiki/Net_Promoter](https://en.wikipedia.org/wiki/Net_Promoter)

~~~
shawn-furyan
If you are bothering the user with a modal, popup, post-install screen, etc.,
then why not ask your customers TO promote the product providing Email and
Social sharing options? Then you can measure how many people ACTUALLY promoted
your product, instead of how many said they would (but mostly probably
didn't).

Declared action is a notoriously unreliable signal.

------
steve-benjamins
As Warren Buffet has said, the best strategies are “simple but hard.” This is
YC advice at it’s best.

(I'm paraphrasing Buffet)

------
betadreamer
Great post where great product -> growth, but I think it's not stating the
real problem. We need to ask why founders are starting to have this mentality.
From my perspective this is because YC tends to give too many generic advices
and some sticks more than others. The big one that caused this is PG's startup
= growth post, and yes he is right and it specifically states you really need
to concentrate on growth.

If you have to take away one thing, then it will be growth but this
generalization is very dangerous because as Sam's post states you need a
product before growth. The better advice is to not concentrate on one thing
but to bluntly say you need to have everything and everything will all come
together. You need great team, great product, and great growth. If one is
weak, you need to fix it.

------
sharemywin
I'm curious what happened to HomeJoy? They talked about having good cohort
analysis numbers(retention) and then they blew up?

~~~
beat
They ran out of money, basically.

------
colund
This growth belief reminds me of the trap of focusing on 'what' instead of
'why' as in
[https://www.ted.com/talks/simon_sinek_how_great_leaders_insp...](https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action)

It seems stupid to do something just because you think you're expected to do
it rather than think for yourself and do what you want to do and think would
be a good idea.

------
EGreg
NAIL ENGAGEMENT FIRST. THEN GROWTH. Otherwise you are just bruning through
users. Your best hope is to attract them back later via transactional
notifications.

~~~
cdmcmahon
Yep. Growth almost never happens by continually attracting more users than you
lose. It happens by not losing your current users and continually adding more.

------
mildbow
This is interesting in how un-interesting it is.

Find product-market fit _before_ taking investment. Because the _only_ reason
to take VC investment (for the etype of startups we are talking about) is as a
steroid injection towards growth.

Why is this the only time _it makes sense_? Because that's the only way you
and your investor's incentives are aligned.

Now, whether you need to/should grow fast to survive in the long term is
another question.

~~~
danielrhodes
This.

It's fine to raise a seed round (< 1M) to experiment with some ideas, but
raising money after that without product market fit is a recipe for failure.

If you don't have P/M fit and you raise a bigger round, you're going to hire
people and create an organization around something that doesn't work. With
those extra people and processes, things are going to slow down to the point
where finding that P/M fit becomes much harder. Moreover, you are now
accountable for expectations and a reasonable return for your investors, which
is not a bad thing, but it is a distraction when it comes to P/M fit.

For B2B businesses, raising a Series A means being able to hire your first
sales/marketing people.

For consumer businesses, raising a Series A means being able to pay for the
growth that's happening without worrying about revenue right away.

------
frik
Two months ago:
[https://news.ycombinator.com/item?id=10495402](https://news.ycombinator.com/item?id=10495402)
(Altman's previous blog article)

How much or little has changed?

------
thedaveoflife
So his advice is to build a great product?

~~~
beat
Or "If you don't build a great product, nothing else you do matters".

------
muxme
I'm running into the growth problem with my website:
[http://muxme.com](http://muxme.com). Lots of people say the love the website,
but it seems like no one is telling their friends. I was thinking of maybe
adding user created sweepstakes, because I think the only way people would
spontaneously tell their friend is if they win something from the site. More
winners = more people telling their friends, but I can only go so far on my
budget. What do you guys think?

~~~
mdolon
Neat concept you have going! You come off as a genuinely nice person in your
videos, which is great for building trust. My one small piece of feedback
would be to consider changing the 'About' link to 'How it Works' instead. I
went to your site and immediately started scanning for those words, because
usually a sweepstakes site has a catch of some sort.

Good luck!

~~~
muxme
Changing it to "How It Works" was a really good idea. Thanks.

------
cdmcmahon
This definitely rings true to me. The company I work for has been around for
~6 years and while we have made money and grown in that time, it wasn't until
the last year really that we hit on exactly what our clients love about our
product and continued to nail that. It can take way, way longer than some
entrepreneurial people are comfortable waiting for. But now that we've found
it, and are continuing to expand our product around what we've found, growth
is starting to come much more easily.

------
edanm
'I think the right initial metric is “do any users love our product so much
they spontaneously tell other people to use it?'

Question - is this a valid metric when talking about B2B companies? I would
imagine there are plenty of B2B solutions which became huge, but which don't
exactly have companies rushing out to tell everyone to use them.

I tend to think sama's question is only relevant for B2C, but I'd love to be
proven wrong.

~~~
baldajan
I would imagine it also applied for B2B. Think about apps like Coda, or
services like GitHub. I remember using a task tracking system that I
completely swore by and told everyone I knew about. All it did was track tasks
and is very much B2B, but my obsession with its UI made me more productive and
those became a talking point, where I'd always highly recommend it. Slack is
another great example of a B2B co that passes that test.

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avivo
I've been explaining this perspective to most clients for years, almost word
for word. Specifically the question/focus: "do any users love our product so
much they _spontaneously tell other people to use it_?"

I'm excited to now have an "official" source I can easily cite for it!

I think there are some businesses where this might be less true, but it's
pretty rare.

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free2rhyme214
Didn't Alex Schultz, VP of Growth at Facebook, already say this...

[https://www.youtube.com/watch?v=n_yHZ_vKjno&feature=youtu.be...](https://www.youtube.com/watch?v=n_yHZ_vKjno&feature=youtu.be&list=PLXIzh6qwMf9htBjuMGPWVoPE-1Jk0oeep)

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rdlecler1
Sometimes it's best to grow more slowly at first, build your brand, your
culture, figure out your process, don't burn through mountains of cash (if
you're lucky enough to have that problem) and wait for the market to come
around.

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Mz
So, basically, get the seeds right, then plant, water, and tend. Don't get
crappy seed ideas and try to overcome their deficiencies with some kind of
fertilizer. (fertilizer AKA "manure"/bs.)

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amelius
> The other thing that these companies have, and that also usually gets
> figured out early, is some sort of a monopoly.

I wonder how this would apply to, say, Uber and AirBnB. What kind of monopoly
do they have?

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bsbechtel
Also, good unit economics or a plausible path to get to good unit economics
for your product (i.e., technology pipeline will dramatically reduce some key
cost for your company).

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throwaway41597
small typo: "and that also usually gets figure out early" => figured

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compumike
Great essay, Sam! I want to expand slightly from a founder's perspective:

You always have two constituencies to think about: (A) your users / customers,
and (B) your not-yet-users/customers.

"Before growth", you should really pay _very very little_ attention to
constituency B. If you're doing anything interesting, there will always be a
torrent of skeptics, doubters, and haters. (That sucks, but it's very human,
and you just have to ignore it.)

Focus entirely on constituency A. There are three "R" metrics to look for: (1)
Retention. (2) Revenue. (3) Referrals. (Note: these are the three "RRR" of the
classic "AARRR" model.)

Initially, constituency A might just be your friends or extended network who
you can convince give what you've built a try. You may be able to get them to
try your new product once or twice, but that's about it.

However, if they keep using it again and again voluntarily, that's a really
good sign (Retention). If they voluntarily and happily pay for it, that's
great (Revenue). And if they voluntarily tell other people they know about it
(Referrals), that's amazing!

Until you have those nailed -- or at least retention and referrals if you're
deferring monetization -- don't worry at all about the "B" group (i.e. don't
worry about acquiring new leads at the top of your funnel), because you don't
have product-market fit yet.

Once you do have a product that the constituency A people love, only then can
you start thinking about constituency B and how to turn them into new happy
users / customers. (While continuing to make your constituency A happy!)

I think Sam is going a step further to place extra emphasis specifically on
_Referrals_ out of all three of these metrics. This is a subtle but powerful
insight. Whether your product is B2C or B2B, most purchasing decisions have a
huge emotional component. If your product is so good that your users want to
tell other people about it, that's a huge step above being merely
satisfactory, and goes a huge way toward powering your growth.

I don't care if you're buying a burrito, a car, CDN bandwidth, or an analytics
SaaS. You as a buyer want a reasonable degree of certainty that you're going
to _feel good about that purchase_ after you've made it. Hearing that referral
from your peer, whether a friend who tried that food truck before, or another
engineer who used that SaaS provider before, goes a huge way toward giving you
that pre-purchase confidence.

If your users aren't excited enough about it to be talking about it with their
peers, you may have to adjust your product or your segmentation of the market
until you get there.

