What worked then probably won’t work now

One friend posted a story about how Facebook has managed to create a USD13B mobile ad business in only four years. Another commented “Do u think its a case of building your market ecosystem first then try and monetise it? #buildItAndTheyWillCome”

No. Although that was the case for Facebook back then. During Facebook’s early years investors backed Zuckerberg to grow users as fast as possible and not worry about revenue or costs.

That changed dramatically in the 2008–2010 economic downturn. Investors said, “You know how we told you not to worry about revenue and focus on growing audience as fast as possible? That’s all changed. We want you to focus 100% on revenue now.”

A lot of Facebook’s early competitors couldn’t make it through that lean time (I know, I was working for one at the time) because we couldn’t pivot from growth to revenue quickly enough.

I don’t remember Facebook pivoting any faster than its competitors, but they were already too big to fail and their investors were prepared to hang in for a revenue business to grow. Which did, eventually.

In the buoyancy of the past few years plenty of startups have been going for that same ‘reach audience scale first, find revenue later’ goal. But that window is already closing again and you shouldn’t try to squeeze through before it shuts — you’re too likely to get caught and crushed by investors who need you to pivot to revenue.

Here’s what I took from my experience: there’s no one startup model that works across all economic settings, platforms and geographies.

You shouldn’t apply a template some other successful startup used five years ago — the market, the customer and the investor have moved on. You shouldn’t even be trying to apply the same model as your competitors unless you have a big, defensible lead (as Facebook had).

You have to move forward like a big cat on the hunt, with all your many business and product senses attuned to the signals that there might be a benefit in what you’re doing now. Look for less validation before making decisions; trust your gut more so you can pivot faster if you need to.

Move efficiently and with the ability to spring forward and sprint faster than anybody else when you have a lock on something. There’s still antelope in the dry grass, but only the fastest of you will get to eat.

That’s hard as hell to pull off! Start keeping more in reserve for lean quarters, small acquihires and knock-your-weaker-rival-off mergers. Even if your team is growing, you’re moving into nicer digs, keep everybody on their toes.

Rainy season is ending, here comes the drought.