How Growing Up is Like Scaling Products, Part 3

6 min readMar 8, 2019

This is the last 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 adulting your way through your 30s — starting a family, getting stable, planning for the future–can be really similar to life at a company after it has discovered product-market fit and has started to pour gasoline on the flames.

In this one we’ll take a look at how the complex navigation of life in your 40s maps to scaling a rocket ship of a company that is expected to maintain impressive growth numbers — even at scale!

40s vs. Late Growth Stage

Growing Up in Your 40s

By this time, kids will most likely be a major part of your life. Maybe you started early, and you’re already becoming a grandparent. Some of your brood might be biologically yours, but statistically it’s not unlikely that you’re a part of a modern family with stepkids brought into the mix as well.

You spend a lot of time making sure your kids are protected from your mental baggage and hang-ups so they can grow up and thrive as independent-minded individuals. You also want to make sure they avoid the common pitfalls and generally have all the necessary tools to succeed in life. You don’t want them going through any of the same growing pains and making the same mistakes you may have.

Your personal life will revolve more around making sure you remain healthy, nurture the meaningful relationships you have, and generally uphold longevity. Health (both mental and physical), retirement savings, and safety become topics of great interest.

While optimizing for longevity, you might have also gotten a little bored of the monotony. Maybe some new hobbies start creeping in to expand your social circles now that you know exactly what type of connections you want to invest in. You might be mature, but humans tend to thrive when they keep growing.

Managing finances is a complex mix of assets allocated in different categories, different modes of leverage (most likely at least a mortgage), kids’ college funds, 401k’s etc. The number on your bank account is somewhat meaningless compared to the size/returns of your asset portfolio, your projected net worth at retirement, and the bottom line of your monthly budget.

Life seems stable, and boring at times, but in reality requires advanced skill to maneuver properly.

Scaling a Product in the Late Growth Stage

Roughly $50–150MM ARR and 300+ headcount.

At this stage stuff gets really complicated.

Your core business is a huge legacy monolith that is nothing but constant trouble–yet it’s bringing in vast amounts of $$$.

All the debt (tech, contract, process, product) that you’ve accrued to push forward is coming to collect–with major interest.

Progress and innovation seem to have ground into a halt.

Yet nothing that jeopardizes the main cash cow is allowed. It’s a testament to the Innovator’s Dilemma.

By this point, you’ve surely kicked off new product lines. Otherwise your growth would’ve plateaued. Some of them might have been internally incubated, others acquired through M&A. Your main product most likely has hit the limits of its total addressable market and the only way for it to grow is to tediously inch off customers from your competition.

It’s critical that you carefully balance between letting your new product lines grow independent and autonomous. Managing a fledgeling business the same way you manage a mature one will crush its chances of success. You don’t want the hang-ups of your cash cow to choke the new business lines.

At the same time, there are efficiencies your behemoth of an organization can provide the new businesses. You need to leverage these to speed up their growth.

A little bit too much in either direction and you’ve got trouble. Too much autonomy and you’ve got a messy potpourri of a company — not to mention a fragmented customer experience for those buying multiple things from your portfolio. Too interconnected, and you’ll keep watching new initiatives suffocate before gaining traction.

While you’re busy managing your new businesses, you might end up ignoring giving your core product line the love it deserves. After all, it’s what is still paying the bills and what built the house. You don’t want to get surprised by a nasty churn trend emerging in you main line of growth.

Question you need to be asking at this stage include:

How much is debt gnawing at your ability to push forward? If your R&D organization is spending 40% of its time keeping the lights on, 20% on minor tweaks to remain competitive, and 20% of its time on custom commitments, how much can you realistically expect to innovate with the remaining 20%? Every startup founder/CEO goes around yelling in agony “We used to ship things every week in the early days! What happened to our velocity?!” at this stage. How can you show them why? How much innovation could you free up by strategic investments into paying debt down — or killing fruitless products or features?
What is the total cost of ownership of different parts of your offering? I’m sure you spent enough time calculating the cost of building a thing and benchmarked it against the short term revenue gain. But did you do the math on what different features are costing you over time on maintenance, support, and keeping them competitive? Are you correlating the revenue or upsell they are generating with what cash or time they are tying up? Could you push down your operating expense with an investment into automation?
Where are the competitive threats? If you’re making real money, someone is scheming to eat your lunch. Disruption happens surprisingly fast and it’s never an issue–until it is. Your customers’ needs are ever evolving and a stagnating product won’t be able to keep up.
How much of your revenue is at risk? If you’re a B2B company that makes longer-term contracts, you need to keep your eye on the future. If your NPS or product engagement is trending down, but your number of ARR at risk next quarter is going up, the risk of gross retention plummeting is huge. The same applies in B2C as well, but with a more immediate feedback look. If you’re not paying attention to this, you’ll find yourself very unpleasantly surprised.

Decisions at this stage are expensive and making hasty changes without a clear readout on rationale is dangerous.

Life seems stable, and boring at times, but in reality requires advanced skill to maneuver properly.

This is the last part of a three part series: