How Growing Up is Like Scaling Products, Part 2
This is the second 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.
In the previous part of this series we looked at how the process of finding your identity in your teens and augmenting it in your 20s correlates with the process of seeking product-market fit in the early stages of a startup.
In this one we’ll take a look at how the scary transformation into real adulthood as you enter your 30s maps to scaling a company once there’s a scent of product-market fit in the air.
30s vs. Early Growth Stage
Growing Up in Your 30s
You start realizing that your time is one of your scarcest resources.
Focusing on the relationships that give back as much as you invest in them becomes a priority. You don’t have time for people who don’t have time for you.
Your persona is pretty well fleshed out as you’re shedding the follies of youth and have become more comfortable with what is intrinsically you. You no longer have time or interest to maintain any side personas or compromise.
Life is becoming quite predictable, maybe even boring. But in that boredom lies fulfillment.
You’re also starting to realize that you need to plan for the long-term. What dollars will you spend when you’re retired? Who will you hang with when your kids head out on their own? Who will be at your deathbed? These questions might not be immediately pertinent to your current day life, but answering them is starting to feel important.
Kids may have entered your life as you’ve realized that as rewarding as personal growth can be, seeing your own tribe flourish is even better. At the very least you’re actively thinking about the right time to start a family.
Managing your personal finances can no longer be done by looking at the number on your bank account, and the balance on your credit card. You (hopefully) have some long term savings of some sort. “Can I afford this?” and “do I have money for this?” have become two very different questions.
Life is quite serious, often scary, and losing control is an ever-present fear.
Scaling a Product in the Early Growth Stage
Roughly $10–50MM ARR and 100–300 headcount.
While you were finding your product’s essence in the startup stage, your sales team has been selling whatever your product does (and then some) to anyone with a pulse. Similarly, marketing has been cramming everyone with a nonzero chance of conversion through the funnel. As a result, your product footprint has grown unbearably high.
Those one-offs and lingering experiments are starting to add up. You’re swimming in tech, contract, and process debt. You’re also starting to see customer churn slowly creep up.
Somewhere underneath the layers is obviously product-market fit. The sweet ringing of your cash register is proof enough. But how do you differentiate between the essential that’ll propel you to scale, and the superfluous that will weight you down and ultimately grind you to a halt?
As you start calculating your total cost of ownership, patterns start emerging. You start asking questions like
- What parts of my product are generating the most value and engagement? What are the universally resonating pieces?
- Which customer segments are we closing deals on fastest and with the best win rates? (Hello, sales pipeline data and cross-functional analysis!)
- Which parts of your product are driving outsized amounts of customer support tickets? Where are you hemorrhaging costs while bringing in minimal trickles of revenue?
- Which customer segments are signing up with higher annual contract values than others? Who are you creating the most value for?
- Which customers are we actually retaining and who is looking for the exit as soon as they’re onboarded?
These questions will lead you through the squishy layers of stuff built opportunistically to chase deals… to find the core of your product.
Once you find it, you need to protect it, and actively sell it only to who values it most.
Block out the rest. Even if it means a bit of pain in terms of saying “no” and seemingly hindering your short-term growth. It’s critical that rapid scale is built on a rock solid foundation.
Make sure you bring data to the table to rally the whole company around this. Product can’t do this alone without Sales, Marketing, Customer Success and all other functions singing the same tune. Gather the numbers, analyze, model… make sure you’ve got the evidence to back it up.
This is also the stage where you really start separating the “now” from the “then”. Great tactics are great and all, but they are all for nothing if they don’t connect to a grand vision.
A big part of this is realizing that very few single-product companies scale past $50–100MM. This might be too early to start new ventures, but you need to at least have a plan in place for how that will eventually happen. Will you expand your total addressable market by starting off new product lines, expanding your current offering to adjacent markets, or finding new growth from a platform play?
You need to have a vision of that by now so you’re ready to execute when the time is right.
You don’t want to reach the limits of your core product’s Total Addressable Market before triggering expansions, but you don’t want the added complexity of multiple product lines any earlier than necessary. Timing is everything.
Managing finances has become quite complex. Instead of fighting against a depleting runway, you’re attempting to maximize the efficacy of money the company invests in its operations. Doing that will require quite extensive financial intelligence to articulate the ways product can drive long-standing business value for the company–both in the form of sustained top-line growth and profitable EBITDA.
Life is quite serious, often scary, and losing control is an ever-present fear.
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