How Growing Up is Like Scaling Products, Part 1
This is the first part of a three part series juxtaposing the growth process of a human from their teens to their 40s with the scaling process of a product from idea to a $100MM+ enterprise.
Teenager vs. Seed Stage
Growing Up as a Teenager
In your teens, you’re still figuring out who you are. Your identity is malleable and you try all sorts of things ranging from dumb to really dumb, to find what sticks. Sometimes they get you into trouble, sometimes into cool adventures.
You’re guided mainly by what feels right — and how your environment reacts to what you do. You balance your instinct with trial & error.
You make friends with those convenient to you: kids on your block, in your school, or ones you meet through your hobbies. You do what it takes to adapt to the desirable social circles around you.
Managing your personal finances is checking your pockets for change and asking your parents for more if you run out. Maybe having the occasional hustle on the side for some funny money.
Life is confusing, but simple. An exhilarating process of discovery.
Scaling a Product in the Seed Stage
Pre-revenue, 1–10 headcount.
You have ideas, a small scappy team, and you run after any visible opportunity in search of validation. Customers, users, deals, partnerships–whatever feels like it’s giving you a scent of success.
You’re guided by the vision of the founder, fueled by a belief that you’re on a path to something great. You just have to figure out what that is exactly.
Your early clients most likely emerge from groups you’re somehow affiliated with already: friends, family, professional networks, local geography etc. You know these people and their needs well, so it’s easy to understand their problems, and sell to them.
You don’t spend a ton of time worrying about how sustainable the means by which you deliver value to these people are. As long as you’re able to win over their approval, you’re fine. Minimally in the form of engagement, but hopefully in dollars as well.
Under the polished facade of your product lies an untenable mess of hacks, manual processes, and a whole bucketful of “just get it done” attitude.
Managing finances is a pretty straightforward activity of keeping an eye on your bank account balance, and burn rate. If your runway is cutting it close, it’s time to raise a bit more funding.
Life is confusing, but simple. An exhilarating process of discovery.
20s vs. Startup Stage
Growing Up in Your 20s
You’re starting to have a much more solid definition of who you are, and you’re really excited to share it with whoever will hang with you.
You make new friends weekly and the attention is thrilling. New relationships are easy to make and it’s fun to explore different types of human connections.
You’re willing to compromise a bit on who you are, as long as your social life is thriving. Extending the boundaries of your identity is fine in the name of exploration. It can even help you discover you yous.
You still base most decisions on your gut: what’s exciting, thrilling, or has the highest chance of instant gratification.
Not a lot of thought gets put into the long-term. You live in the now.
Growth is still pretty easy. Learning new skills comes naturally at this stage and it’s a thrill to go from nothing to something fast.
Your parents call in from time to time asking whether you’ve started a 401k. Last weekend you ran a 5k (on a dare) and are a bit confused if what they’re asking about is just like a crazy long run.
Managing personal finances starts to require some finesse of leveraging credit carefully, planning for upcoming larger expenses, making sure you’ll make rent etc. Chances are you’re still living paycheck-to-paycheck. For the most part, you’re good to go if you’ve got a positive balance on your bank account at the end of the month and you’re able to peek at your credit balance without a panic attack. Even if sometimes you just absolutely need to charge that trip to India on your CC.
Life is a free-form thrill-ride, but it’s starting to get serious...
Scaling a Product in the Startup Stage
Roughly up to $10MM ARR and 100 headcount.
Is that the scent of Product-Market Fit wafting in the air?
It feels like it, but can we be sure?
People are buying.
In B2B, the sales team is banging their gong all the time and are chasing anyone with a pulse for new deals. And they are closing successfully. Even if they have to bend the limits of what your product does sometimes.
In B2C, the marketing team is pushing their CAC budgets sky high to push the whole world into the top of your funnel. A non-insignificant portion of them are converting to paid too and churn is… not horrible!
The pace of growth is intoxicating. At this stage, hitting triple-digit year-over-year growth is still pretty easy as doubling — or even tripling — a small number is not necessarily that hard.
In B2B, you accrue contract debt as your salespeople are promising their prospects your product does everything–and then some! They need to fake the funk as you’re probably up against some mature competition that does all sorts of tricks your product doesn’t — yet!
You’re also accruing process, product and tech debt. Quick hacks and manual processes can get you over the hump faster.
That’s fine. Debt is a great tool. You just need to make sure all debt is accounted for. You’ll have time to pay it off later, but only if you know what lines of credit you’ve opened.
You’re still most likely lead by your founder-CEO and driven by their vision. The name of the game is rapid fire ideas, unencumbered execution, and instinct over “analysis paralysis”. Opportunities-at-hand trump over strategy.
Managing it all is simple as the whole team is still below Dunbar’s Number in size. Personal relationships are valued highly, and you can turn ideas into action on a dime, because most of the team exists within shouting distance.
Advisors, investors and senior people in the team are starting to ask for long-term plans, strategy and vision. But more often than not, it’s feels odd to talk about your 5-year plans when you’re still not sure you can survive the next 6 months.
Managing finances is starting to get a bit complicated. You already need to start comparing short-term vs. long-term returns on your investments and making decisions based on their impact on the bottom line. But at the end of the day, you’re still primarily focused on making sure that the company actually makes payroll and keeps its AWS instances alive by bringing in enough revenue, or fundraising well ahead of depleting its runway.
Life is a free-form thrill-ride, but it’s starting to get serious…
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