For Startups, Growth is Life

“The growth of a successful startup usually has three phases:

1. There's an initial period of slow or no growth while the startup tries to figure out what it's doing.
2. As the startup figures out how to make something lots of people want and how to reach those people, there's a period of rapid growth.
3. Eventually a successful startup will grow into a big company. Growth will slow, partly due to internal limits and partly because the company is starting to bump up against the limits of the markets it serves."

                                                                         - Paul Graham (Startup = Growth)

Startups exist for one reason:

To create and distribute value at scale.

Did you read that, founders? Just make something people want and get it to them ASAP. But… that’s easier said than done. For one, startups must provide value in order to grow. Yet without clear growth, it’s difficult to measure value. In a fog of ambiguity, founders struggle to learn, build, validate, and (above all else) grow. 

For a startup, growth as the goal makes sense. Particularly for investors, who take on big risk for a potentially huge reward. Yet without enormous (hockey-stick) growth, even moderately successful startups yield returns too small to make it worth an investor’s time. Hence, the entrepreneurial mantra: go big or go home.

Y Combinator (YC), a top seed accelerator program, urges founders to pursue growth like its the holy grail. Growth rates for all YC companies are measured weekly, a short cycle pushing founders to collect feedback quickly for optimized growth. Founding partner Paul Graham suggests a good growth rate falls between 5-7%, with 10% proving exceptional. Why these numbers? Remember: investors pick companies they believe have potential to produce a huge (10x +) return. And, as outlined by Graham (Startup = Growth), small differences in weekly growth rates yield vastly different annual returns:

• 1% weekly growth = 1.7x
• 3% weekly growth = 2.8x
• 5% weekly growth = 12.6x
• 7% weekly growth = 33.7x
• 10% weekly growth = 142.0x

The delta between success and mediocrity is tiny. Grow at 1-4% and prepare to fade into oblivion. Grow at 5-10% and expect happy, happy days.

Thoughts

So… how do you achieve growth? There’s plenty of literature on the subject, so I won’t get too technical. However, I have seen several thoughtful approaches that make a difference. I've listed a few observations below. 

Know Thy Customer

Like a doctor, good entrepreneurs ask questions before making a diagnosis. I’ve met many talented founders who begin with a diagnosis (solution), and work backward to find pain. Instead, map your ideal customer profile (ICP) first and identify a “who, what, where, when, and how” outline. Go on a seek-and-discover ICP mission, exploring pains and running experiments to determine if your idea or product provides a world-class solution.

Starting (and staying) customer-focused enables founders to create desirable products that can be sold at scale. No demand = no growth.

Lay the Foundation First

I caution against founders relying on hacks, PR stunts, or other short-term moves that prove unsustainable or unrepeatable. Before scaling, every high-growth startup first built a solid foundation for their business:   

1. What one thing can we be the best at?
2. Are we passionate about that one thing?
3. Can that one thing generate revenue?

Founders who answer all three questions have a better chance at reaching significant growth down the road. Focus is a big deal.

Discipline

  But I'm not mad at the slightest, the public praises you for what you practice in private -- Russ, " Brooklyn"

We celebrate greatness without acknowledging the work behind it. VentureBeat, TechCrunch, and other media sites spotlight top performers and star companies without the public witnessing the absolute hustle, unbelievable struggle, and constant turmoil behind success. We view the achievement of companies like Amazon without considering the mundane, routine, daily behaviors that make success possible.

In order to achieve growth, don’t obsess over it. Instead, create an unwavering culture of discipline to provide value to customers. Stay internally focused and consistent, and external growth will follow.

+ In my experience, discipline keeps you going far longer than motivation alone. 

Last Thoughts

Measuring growth helps founders focus, stay disciplined, and demonstrate progress. It serves as both a goal and a north star, keeping startups and investors accountable. Just remember, the path to growth is an experience. Have fun, test every assumption, and iterate constantly to achieve takeoff.