I just finished a book about startups called “Zero to One” by Peter Thiel. Peter co-founded PayPal and was the first outside investor in Facebook. He’s a sharp guy and I recommend his book if you are into books about startups.
My favorite two sentences in the book, and perhaps my favorite two sentences I’ve ever red about startups, are “For a company to be valuable it must grow and endure, but many entrepreneurs focus only on short-term growth. They have an easy excuse: growth is easy to measure, but durability isn’t.”
I couldn’t agree more. I love this idea, and while I agree that growth is measurable and durability isn’t, I don’t think that’s why most startups focus on growth. I think most startups focus on growth because that’s what you are supposed to focus on. It’s what everybody asks… “How fast are you growing?” It’s the commonly accepted measuring stick for success.
But it’s often the brightest flames that burn out the fastest. Companies obsessing over growth may grow fast for a while but often forget the fundamentals. Great customer service. Easy to do business with. Happy staff who are treated well. Making each customer experience memorable. These are some of the “basics” that often are left on the side of the road as we speed ahead with a singular focus on growth. At first we don’t realize we’ve left them behind, but eventually our growth begins to stall, and we wonder why. And we then look around and realize that we’ve forgotten all of those things that were obvious at first but were gradually lost in our obsession with doubling last year’s sales, or whatever measurable calculus we’ve decided to use to determine if we are successful.
In Nov. 2012 I wrote a post titled “The tortoise, the hare, and why I’m glad we’ve grown (relatively) slowly.” I had forgotten about it until I wrote the previous paragraph. I just looked it up so I could link to it, and realized it was a very similar post. Here’s a comment I made in it:
“It’s my experience that most enduring, successful businesses grew ‘slowly’ only when you compare them to stories the media tells us about ‘viral’ apps and companies like Groupon skyrocketing into the business limelight overnight.” Like I said, it’s often the brightest flames that burn out that fastest. I don’t mean to pick on Groupon, but their story fits with the flame metaphor. We all know many more examples. I can think of another hugely popular current example that you’ve probably all heard of, but I hear their CEO goes after people who use their company name in anything but a positive light, so I’ll leave them un-named. They’ve grown amazingly fast and everybody I know talks about them. I’d be amazed if that’s the case three years from now.
Anyway, when you start your software business or your restaurant or whatever business you decide to start, think about this idea. Think about whether what you’re doing, and the team you plan to do it with, will be able to endure for 10, 20, 30 years. Don’t worry about how fast you are growing as much as that you are nailing the fundamentals and the basics every single day, every week, every year. If you do, you’ll endure. And if you endure, you’ll grow at the right pace.