Startups and products are about solving real problems from first principles.
Sometimes, a fundamental change occurs in regulation, culture, macroeconomic conditions, and/or technology, allowing you to re-think the problem and solution space from new principles.
Generative AI is such a fundamental change.
But the original intention/goal/pattern doesn't change. Solving real problems.
Don’t do this.
Founder running a company with huge potential - but it’s going sideways. He reaches out asking for help getting to the next level and unlocking growth.
We engage.
We have 1 meeting.
He cancels.
Months later he reaches out to engage again.
I decide to give it another chance despite my reservations.
We have 1 meeting.
Then he emails saying he wants to switch to working via written questions.
I explain this is a bad idea but I’m open to trying it as an experiment.
His submits written questions that are about me, not his business.
I answer the questions I’m willing to answer.
He cancels.
🤔
I’ve worked with only a few people who I would consider completely incompetent.
Very few people act like this.
But this is an (very) extreme version of a common trait amongst inexperienced operators: a lack of consistent execution and follow through .
NOTHING will work if you don’t do it consistently over time.
Making fast, thrashy decisions can feel decisive, but it’s likely to be wasteful and blunt any momentum you might have otherwise experienced.
Effective leaders walk the line between acting consistently and concienciously over time, and being agile enough to appropriately adjust to changing conditions.
Ineffective leaders get this balance wrong. They just spin their wheels and drive everyone around them crazy.
I've had a number of people ask me recently how I find and select the companies I work with.
The answer is quite straightforward. But the last method might surprise you.
My primary sources of deal flow:
- Ambient reputation: People have heard of me (but they're not quite sure how) so they google for me and reach out from my site.
- Word of mouth: Founders I've worked with tell other founders to reach out to me.
- Social media: People stumble onto my social media posts, go down a rabbit hole, and then reach out because my world view and advice resonates with them.
- Newsletter: People have read a newsletter (sometimes because someone forwarded it to them) that alerts them to a problem or opportunity in their business. They then reach out from my site.
- Podcast: People are discovering and listening to my podcast regularly. It's growing fast (from algorithms or listener shoutouts). Some founders and operators like what they hear and reach out.
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- VCs: Investors suggest founders contact me under 2 very different scenarios. a) They meet a lot of companies that are not yet ready for investment, so they send them to me to help them get ready, and b) They invest in companies and then learn about an opportunity or a weakness that I can help with - so they introduce me - this de-risks and maximizes their portfolio outcomes.
- Licence plate: You wouldn't believe the number of people who have stopped my wife, my dad, or me at the lights and asked about the plates on our cars (STRTUPS) - and then they want to connect.
My criteria for choosing to work with a company:
- 6+ months of operating capital.
- Potential to disrupt some fundamental aspect(s) of the world.
- A founder with ambitious goals.
- A coachable team, eager to evolve and improve quickly.
- A deep appreciation for opportunity cost and the value of moving fast.
- A “Chris-shaped hole” in the team where I can add a lot of value quickly.
In the old world, your direct reports worked for YOU.
In the new world, YOU work for your direct reports.
It's YOUR job to fix org problems such as a lack of resources, context, clarity, causes of inefficiency and thrash, etc.
Are you doing a bad job? Does your team need your help? They will escalate to you. You better do a good job when they do!
Learn more about this in our escalation episode of The Startup Podcast - link in the comments.
One of the biggest mistakes that product managers make is to believe that their job is to capture and translate requirements for and into engineering.
This is wrong.
The job of a competent product leader is to triangulate a product vision and roadmap and translate it into ALL business functions - engineering, sales, marketing, biz dev, corp dev, operations etc.
Pretty much any piece of software you're building needs some basic fundamental capabilities.
These include...
- Identity + Authentication + Permissions
- Data persistence + Change logs
- User Notifications (Notification tray, email, SMS, and more + end-user controls)
Can you help me think of more?
Never underestimate how attaching a clear name for a discrete product module/deliverable can motivate engineers to create beautifully encapsulated components that can be more effectively iterated and improved over time.
Typically, you want to hire for first principles thinking, horsepower, and talent.
Domain expertise is typically a low priority or even works against someone joining a disruptive tech company.
As a go-to-market team at a well-run growth company you also need…
1. 30 Day Active users
2. Average engagements per month per Active User (whatever engagement looks like for you)
For each, you want to see a line chart over 12 months or so.
You want to see each of these numbers going up and to the right each month.
For a complete picture of growth, you should also consider a funnel analysis for the New User journey.
Something like this...
Potential new user clicks and Ad -> Potential new user hits Signup Button -> Signups -> First key engagement -> First repeat engagement.
This will allow you to see where Users are getting stuck.
The product team should have a FAR more detailed version of this funnel analysis showing every single step of signup, first engagement, and retention to figure out how they might optimize the funnel.
Big strategy offsites with leadership teams are often used to develop big important strategies for companies.
This is typically a flawed approach.
These offsites often produce long laundry lists of items that everyone believes need to be addressed. The inevitable outcome is that someone organizes the chaos into categories and calls it a “strategy.”
Strategy is as much about what you won’t do as what you will do.
In my experience, big strategy offsites are useful for two distinct purposes (these should not be combined in the same offsite):
1. A leader can gather a wide range of raw ideas, which should undergo extensive consideration and pruning (separate from the offsite) before being formed into any kind of strategy.
2. A leader can socialize a roughly pre-defined strategy with their team for debate, final refinement, and buy-in. The intention is for the strategy to be operationalized immediately after the offsite.
In both cases, however, there is so much that can go wrong.
Here are a couple of tips to minimize bad outcomes:
1. Ensure there are one or two people with clear discipline, taste, judgment, and knowledge of modern comparables from successful companies. This can be the difference between a successful offsite and a giant talk fest.
2. Be cautious about piecing together ideas and insights from "comparable" companies. Often, a) the companies are not truly comparable, b) piecing together different strategies from different companies with very different strategies can result in a confused outcome for your company, and/or c) you can learn the wrong lessons from those companies. Any combination of these things can be disastrous.
You must be consistent across your strategy and reason from first principles.
A classic Product + GTM mistake is going after “all the customers” simultaneously.
Each segment wants something different. Sometimes, the differences are very, very subtle. Sometimes, they are really obvious. However, in all cases, the different requirements take time and money to implement well (both in Product and in GTM).
So, if you try to sell to every segment, your team will be thrashed with never-ending random requirements, your product will never be polished, and you will never build something great that wins in its category. You’ll be spinning your wheels.
If you sell to one narrowly defined segment at a time, you will hit your sales targets while giving your product team enough time and space to polish what they have - ensuring that your product will become a category leader at scale.
Here's how you do it.
Answer the following 2 questions...
Question 1. What is the embarrassingly narrow target segment we want to win - this segment should have 2 characteristics
a) Mostly satisfied by your product *as is*.
b) Large enough Total Addressable Market within the segment that you have room to hit your growth/sales targets (assuming you successfully penetrate the segment).
Question 2. What will it take to accelerate and de-risk winning as much of that segment as possible as quickly as possible? This will require changes to your go-to-market strategy and tactics as well as careful refinement of your product roadmap.
Questions you do NOT need to answer...
1. What’s the largest TAM? The largest TAM is not necessarily accessible to your product in the short term.
2. Where are opportunities to grow? There are opportunities EVERYWHERE. The question is which opportunities are available to you RIGHT NOW.
3. Relative market sizing of a particular segment vs. any other particular segment. You are eventually going to go after EVERY segment - you just need to get them in a methodical way - one after the other.
Success looks like...
1. An exhaustive list of narrowly defined segments - along with their unique requirements.
2. Those same segments plotted out on a roadmap (an ordered list mapped out over time) - you want to be working from one segment to the next to the next, each time just adding 1 or 2 features to unlock the next adjacent segment.
3. A fully aligned team (especially product and GTM) that is working from the same definitions and roadmap of segments.
Example...
You might be selling a transport solution that gets people from Point A to Point B.
Your Segments and Segment Roadmap might include:
1. Pragmatist/Lower socioeconomic buyer with a short 2-5 block commute
2. Pragmatist/Lower socioeconomic with a longer cross-city commute
3. Middle class/status chaser with short 2-5 block commute
4. Middle class/status chaser with longer cross-city commute
5. Rich snob with short 2-5 block commute
6. Rich snob with longer cross-city commute
So what are you going to build?
1. Persona: Pragmatist/Lower socioeconomic buyer with a short 2-5 block commute -
Product Changes: Low cost simple scooter with short battery life
2. Persona: Pragmatist/Lower socioeconomic with a longer cross-city commute
Product Changes: Low cost simple scooter with longer battery life and some creature comforts
3. Persona: Middle class/status chaser with short 2-5 block commute
Product Changes: Mid cost simple scooter with longer battery life and nicer materials
4. Persona: Middle class/status chaser with a longer cross city commute
Product Changes: High cost scooter with long battery life and nicer materials
5. Persona: Rich snob with short 2-5 block commute
Product Changes: Super fancy scooter with long battery life and limited edition black on black packaging
6. Persona: Rich snob with longer cross city commute
Product Changes: A 2 person scooter that comes with a Chauffeur
For each of the above, there would also be GTM messages and tactics that align with the persona.
Hopefully, it's obvious that subsequent product versions naturally build on the previous versions with minor variations (E.g., a longer battery life on the same basic scooter).
You build each one, one after the other. You CAN'T do it all at the same time.
Dear Mr. B2C Founder,
Are you building something great for consumers that business buyers might like to buy and provide to their employees? Examples include wellness apps, transport apps, professional development apps, etc.
Chances are that some advisors, mentors, investors, or other misguided people are telling you to "switch" to B2B.
The thing that all those people don't understand is that those "B"s are just made up of "C"s.
In other words, businesses are just collections of people.
Those people want beautiful, effective, and easy-to-use products - just like every day "Consumers" do. They've been trained to expect great product experiences from Apple, Google, Canva, and more.
So, building an incredible consumer experience is on the critical path to building an incredible B2B product.
Once you've built the very best consumer product, then you can offer other businesses an opportunity to send a link to their employees to sign up.
Bonus tip: Avoid making your thing a) white label and b) hard to integrate.
It seems that selling FUD is very popular and profitable these days.
I don’t buy it.
1. There ARE good ideas (best practices and considerations) that, if well applied, generally work and generally move the ball forward in terms of org design, culture, product innovation and success.
2. In most ways, the world is far safer and more productive than it’s ever been in history.
3. People and processes of far more adaptive and resilient than we generally imagine.
4. The world and the universe are fundamentally abundant. Scarcity tends to be rooted in a failure of imagination and/or a lack of political will.
Don’t let cynics and skeptics hold you back from greatness.
Surround yourself with, and hire, optimistic people. Broaden your vision. Act boldly. Take on the world.
Be careful of engineers who are too cynical.
Be careful of product managers who are too optimistic.
The nice thing about cross functional squads is that people from a given function report to others (more senior) who share the same function and craft.
These fellow craftspeople have the skill and context to properly mentor, nurture, defend, review and ultimately promote or fire their juniors.
So in a battle between two different people from two different functions (each with two different perspectives and two different different jobs to get done), each come at the problem with equal footing, fully empowered to fight the fight and have the best idea win.
If they can’t come to a principled decision, it is natural and common for them to escalate to their managers - ostensibly two more senior craftspeople - to debate from a higher vantage point with more context and seniority.
The result is a healthy competition of ideas, and the escalation of differences of opinion, without one function dominating the others.
This, of course, does not mean that some functions are - by virtue of their role - not half a step ahead of the others and often play an outsized role in influencing outcomes and coordinating the other functions. Product and marketing are obvious examples.
Be careful to avoid adopting the “cross functional squads” model while undermining its biggest strengths. In this case the strength of empowered functional representatives each bringing their full power to the table combined with the power of escalation to surface weaknesses in context or difficult decisions that need careful attention.
Amongst the highest "goods" a scaleup can strive for is "Alignment."
Alignment requires a culture of "Disagree and Commit."
"Disagree and commit" requires "Strong Opinions Loosely Held" + Clear decision-making power vested in the roles and escalation pathways + Bold, decisive decision-making by those decision-makers (no hedging!)
So you're a marketplace struggling to monetize or raise capital in your small market of B2B-obsessed VCs?
So you're thinking of creating a white-label version of your tech to help the incumbents in your industry - hoping you can make a little quick revenue and make your VC friends happy?
1. STOP
2. Remember that B2B is NOT easier, less risky, and less capital-intensive than B2C. Learn more.
2. Don't listen to the VCs. Explain why they're WRONG (if you don't know why - let's talk)
3. Instead, build BRANDED PRO features for your supply side - they make your marketplace more efficient, and you can even charge for some of them. Win/win. Think Instagram Creator tools, AirBnB Super Hosts etc.
The only thing worse than having too many focus areas and insufficient resources is...
Having too many focus areas and insufficient resources, and not KNOWING.
Be careful about planning and management tools that BURY cost, complexity, resource contention etc.
Find the pain. Solve for the pain.
Overheard at Silicon Valley networking event...
Founder to VC partner they just met: "We're raising a seed round of 1.5m to build Y"
VC to Founder: "That's too small. You should be raising 3m+. We don't want you to underestimate what it takes to win and wasting time having to go fundraise again too soon"
Can you imagine if your tech/VC ecosystem thought the same way?
This is why Silicon Valley wins.
Can it create an overinflated bubble powered by FOMO? Yes.
Does it also create the most valuable and impactful companies in the world (and massive returns for the top funds). Also yes.
As a VC and/or Founder, do you know what game you're playing?
It's a big boy (or girl) game of power laws and the first to network effects wins.
Raise and fund properly. Win. Or lose. But take your shot.
BIG MISTAKE: "We're just going to do this for a few customers..."
When thinking about staying focused and avoiding working on the wrong things for the wrong customers and use cases, it's better to have ZERO or a LOT.
People who admit distraction into their org will often argue, "Oh, this is just for one customer" or "We're only going to do this for a few people" - as if this is some kind of virtue.
Having "just a few" is the WORST of BOTH worlds.
You get all the requirements and distractions and none of the scale.
Do it. Or don't do it.
If you're going to do it, plan to SCALE it aggressively.