What if I Can't Grow Fast Enough?

At a Glance:

• Why a growth focus kills companies

• How to push back

• What to measure now

My first book helped me realize, by my estimate, that 90% of startups fail due to the leadership’s psychological and emotional blind spots. 

The Problem of Metrics

Success metrics are a huge symptom of this problem. Desperately trying to live up to investor expectations, leaders often sacrifice learning for growth by focusing on short-sighted measures of success, such as CAC (customer acquisition costs), NPS (net promoter score), and ARR (annual recurring revenue). They subconsciously prioritize optics over long-term health. 

I did this. And the company might still be going if I didn’t. This is for the leaders who feel alone pushing back. 

This problem of metrics wastes trillions of dollars nationally and becomes even more destructive in the age of automation and pervasive sameness. Companies without a beating heart and a long view will have no leg to stand on. Leaders must be strong in creating an organization that is built to last. Investors have a portfolio. You have one investment. Fight for it. 

Push Back

Instead of short-term growth, great leaders say to their investors, “I’m going to run this company in a lean, disciplined, and smart way. I’m not going to spend all your money quickly by focusing on ambitious growth until I KNOW it would be irresponsible not to. I’m going to focus on learning and innovation and patiently wait for the right time to strike. If you want to help us, celebrate our learnings and introduce us to good people.” 

Investors don’t know your market well. They use pattern recognition to recommend strategies, and metrics are a lazy shorthand for success. You can push back and focus on a long-term moat based on relationships, not selling whatever you can to whoever you can in a race to hit arbitrary growth numbers. 

What to Measure Now

As the world gets more commoditized, create metrics that are unique to your vision as the guidelines, such as the emotional arc of the customer relationship, the resonance of your story, quantified learnings about your advantage and long-term expansion potential, the strength of the customer community, and the feelings elicited by product usage. And most importantly: are you winning a small, beachhead market that will “pull” you towards downstream growth later (not having to “push” on to unsuspecting markets)?

You’re still driving the car. Tell the “Are we there yet?” kids in the backseat to be patient. It’s gonna be great when you get there. 

With love, 

Dave  

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