Toxic Growth: Why these 2 growth trends are *toxic* ??

You know what happens when I go on?Twitter and see that even Naval Ravikant woke up and chose violence??

Or when I escape to?LinkedIn just to hear Jason Lemkin preach that if you're not experiencing exponential hypergrowth, you're basically dead in the water??

...I frees a lot of pent-up?Britney in my head:?

No, they won't come if you build it. And exponential growth is a myth.?

I've recently realized that tech/SaaS influencers on Twitter and LinkedIn can be to SaaS founders what photoshopped Instagram influencers are to teenage girls: an endless source of comparison, negativity, and?really bad decisions.?

Off the top of my head:?A friend of mine invested 5 figures in a SaaS startup that has now burnt through most of their pre-seed round. Instead of doing proper discovery and building the product in a lean way, the founder hired 36 people and now has built a product nobody wants. He has a?1% user activation rate?(go?here?to learn how to improve yours)?and is desperate for more money no-one wants to give him now. Yet somehow, he convinced the VCs to give him a pre-seed round.?

Stories like that abound. Every day, you hear that yet another of your competitors have raised several million $ in series A.?

But if they scale it before they've nailed it, what you'll see next is that:?

- they spend the money on marketing recklessly, inflating their growth figures in an?unsustainable?way;?

- they spend the money on product recklessly, building features nobody wants.?

If you're feeling inadequate because of what this or that SaaS/Product influencer has told you, here's a quantum of solace for you:?

?

1) Exponential growth is a myth.?

TL;DR???Watch me narrating this chunk of text instead.

Re:?"You can’t go from $4m ARR one year to just $5m ARR the next and really get anywhere.?You can’t go from $15m ARR one year and then only $20m ARR the next and beat the competition.?If this is the best you can do … then you’re on a slow and painful march to irrelevance and atrophy. "?(Source)

Anna Holopanien’s brilliant?SaaS reads newsletter?reminded me last week that well, hypergrowth is a myth.?

Growth *always* decelerates.

• Even the fastest-growing companies in history like Facebook don’t grow exponentially (by multiples - e.g. by 10 in year 1, 100 in year 2, and 1000 in year 3). They still grow quadratically - by a steady value every year?(e.g. by 10 in year 1, 20 in year 2, and 30 in year 3.)
• That still means they grow more year-on-year, but they don’t necessarily grow *faster* every year - if you’ve grown from 10 to 20 in year 1, that’s a 100% increase. But if you’ve grown from 40 to 70 in year 3, that’s “only” a 75% increase. Is it a?“bad, you’re dead in the water” growth curve according to VCs then?
• Now, where does the hyper-growth myth come from? Sometimes, these hyper-growth companies seem like they grow exponentially, but?only because?they either enter a new market?with a new product, make an acquisition (or several), or their markets expand significantly.
• In finite markets, marketing-driven products follow an “elephant curve”: “[campaigns] start flat when the new campaign is ineffective; in the optimization phase, we test our way to incrementally better results; and finally, campaigns enter the phase of decline where the audience saturates (if the campaign ever flies, that is), the channel declines and in paid channels, the auction becomes uneconomical.”
• The problem with the exponential growth myth perpetrated by VCs is that it leads many SaaS founders to feel like failures if they don’t grow *faster* every year.

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2)?No, they won't come if you build it.

• Talking to your users/potential users is completely free. (And as my high-school maths teacher used to say: "free is not expensive!"?) If you're building new features so fast that you need 20 million to implement your product vision, you're probably not talking to your users/prospects enough to understand their problems well??Apply?Tereasa Torres'?continuous discovery framework?and have some patience. Lean and iterative product design is better.?
• Well, as?much?as I get that Naval probably meant well and wanted to tell you that no amount of sales or marketing is going to save you if your product is fundamentally bad (and if it is: see point one), some people take that advice too literally. Before you fire your sales and marketing teams - bear in mind that Word of Mouth is great, but it's not a channel you can control. If Coca-Cola still feels like it?needs?marketing after 100+ years of being THE cola brand, do we really need to argue this any further??
• Even the best product with the best UX won't defend itself once things get *complicated*. Some of your users will not discover some of your product features that they?actually?really need. You need to keep marketing your product to your existing users, in-app. The best UX and UI can't explain some server-level events that your user may not expect to happen (or not happen) when they navigate your product. You need to tell them what's happening behind the scenes. How could I know that Hubspot won't track my email if it didn't tell me??

P.S. You can build similar experiences with Userpilot?without any code.?

Hope this post made you feel better.?Keep going. You're doing fine. That six pack was photoshopped. That hypergrowth doesn't exist.?

See you next week!?