The Harness & The Whip
Build the business to pull your company, not the company to push your business.
I’ve been listening to Reid Hoffman’s Masters of Scale Podcast, and I have to say — despite the Silicon Valley bullshit and frustrating contradictions (Episode 1: Always Listen To Your Customer!, Episode 10: Stop Listening To Your Customer!…) it really is excellent. As a Boston entrepreneur/VC it’s struck me how focused they are out there on something we seem to pay much less attention to, namely the challenges of scaling a business super-fast after the point of product market fit.
Product Market Combustion
For all the talk of Lean Startup and Four Steps, there’s no evidence I’ve seen that West Coast entrepreneurs have a higher hit rate of product market fit than we do on the East Coast. Because their startup community is so much larger they have more companies that get there, of course, though this linear relationship hardly explains their outsized success.
What does, in my view, is how much better they are at working through the false positive of weak product market fit to find something much more potent. It strikes me listening to Reid each week that West Coast entrepreneurs and VCs look for more than “fit” in the relationship between product and market. They want to see a spark at that touch point, the ignition of something that can burn the heat it generates. Call it product market combustion, maybe, but it’s a much higher standard of proof than whether you can get a few customers to buy the same thing the same way in advance of raising a Series A.
At the point where an East Coast startup might be settling into heads-down execution mode, it seems like West Coast startups are still iterating through big strategic options, bold product changes, and unconventional go-to-market alternatives in search of a formula simple and compelling enough to grow fast, without needing a team of selfless geniuses to push a rock uphill for ten years in order to get to an exit.
While I’ve often said one of Boston’s startup advantages is the loyalty of good people willing to stick around long enough to build something great, I’m coming around to the view that the downside of our more patient and even diligent startup culture is a tolerance for weak product market fit that would simply lose the battle for talent and capital raging every day in Silicon Valley.
Google vs. Lycos
Google is a great example. What created the Google we know today wasn’t just a superior search algorithm to the one Lycos had been polishing up in Waltham for years before Larry and Sergey ever had their epiphany. What makes Google Google — what enables the spectacular lunches and free dry cleaning and self-driving cars and entitled engineering bros right up to the present day — is an auction-style cost-per-click model called AdWords that generates tens of billions of revenue per year, without the need for particular acts of heroism on the part of anyone currently employed by Google.
It’s easy to forget that AdWords’ auction-style pricing approach was pretty revolutionary back then, that it replaced the more conventional CPM model the market leaders had adopted up to that point. It’s hard to say whether an East Coast Internet-search powerhouse would have climbed to the top and still been pressured to keep innovating on business model and product in quite the same way Google did back in 2000.
Except one did. And it didn’t.
Less Whip, More Harness
There’s nothing in the water that makes Silicon Valley special. They have a critical mass of capital, talent, and anchor companies, to be sure, but at the core of their success is a culture of entrepreneurship we can selectively copy, localize, and improve upon with a little time and effort. I’m still 100% convinced there’s no better place to build both a company and a life than Boston (especially if you’re a woman or an immigrant,) but we need to continue to evolve in terms of our own expectations of what startup success really looks like.
Startup success takes hard work by really smart people no matter what it does or where it does it. But the kind of startup success we need more of here is the kind where the focus of that work is on keeping up with the organic growth that comes as the by-product of a truly winning formula, not on the unnatural acts required to overcome the constant challenges of a weak formula while maintaining the appearance of winning.
Keep innovating boldly until the challenges of keeping up with your business are greater than those of driving it.
Don’t settle for success driving your donkey with the whip. Keep right on changing out variables in your strategy, product, and go-to-market model until you’re past the minimum threshold of success… to the point you’re more worried about whether the harness on your pack of wild, careening sled dogs will hold until you can get to the finish line.
That’s what startup success should feel like. We have our share of it here, but it’s about time we had more.
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