Not Just Growth, Sustainable Growth

Some unsolicited thoughts on the current early stage startup environment.

This past year I’ve been helping Seed to Series A companies get things together to grow and setup to raise a round of funding. What that really means is I do growth. A year ago, growth at any cost was all the rage. If you could get 20% MoM growth and show that you could maintain it *probably*, then you could raise what you needed.

Soon after some very smart people started writing/tweeting/blogging/writing about how crazy things were getting. Then they started asking questions, questions like what happens after you achieve these aggressive growth curves, how do you maintain them, suggesting that we need to look at crazy ideas like sustainable growth and unit economics.

All of the sudden, like magic, things cooled down a bit. Investors stopped competing for “hot” deals, they stopped playing the Unicorn game.

But I still get asked the same thing from founders, usually something like “I need some special growth pixie dust so I can raise my next round!”

It isn’t that investors are not looking for growth, they definitely are. It isn’t that growth isn’t important for your company, it definitely is.

Identifying repeatable and sustainable growth opportunities is the growth phrase of the day. This is the hot *new* trend in the seed and Series A rounds these days. Or more simply put, building a business that can acquire customers at a price that can be recovered quickly and become profit machines for you over a longer time frame.