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I agree with this, but not every startup's business model has the luxury of operating under that calculus. Particularly in markets with network effects or other

I agree with this, but not every startup's business model has the luxury of operating under that calculus. Particularly in markets with network effects or other winner-take-all dynamics. You're either first or you're dead. And at least one of your competitors will be investing big on VC-powered hyper growth. Slow and sustainable growth may increase short-term survival chances, but guarantees that you lose in the long-term. If Instagram or AirBnb didn't plan for rapid scalability, and focused on short-term sustainability instead, they'd almost certainly be footnotes. It doesn't mean that a startup pursuing an expensive hyper-growth scalability strategy is a good investment. But a startup building a social network or B2C marketplace will never conquer the network effects without that ingredient.

yellowapple 6y ago
> Slow and sustainable growth may increase short-term survival chances, but guarantees that you lose in the long-term. I'm arguing the exact opposite: that slow and sustainable growth is exactly how you maximize long-term success. And there are very, very few markets that are truly "winner-take-all". They only seem that way because everybody's doing the exact thing against which I'm warning: trying to emulate and catch up to already-big players instead of carving out their niche and playing the long game. > If Instagram or AirBnb didn't plan for rapid scalability, and focused on short-term sustainability instead, they'd almost certainly be footnotes. Statistically speaking, they'd almost certainly have been footnotes anyway. That's the nature of startups that pursue VC-powered hypergrowth: you're counting on a heck of a lot of luck. (And not that I'd be complaining much if those companies were footnotes, either; AirBnb in particular has done a great job of exacerbating housing crises around the world, and Instagram - like most social networks - seems to rely entirely on throwing every dark pattern imaginable at its users, even before Facebook bought it. Good riddance to the both of 'em.)

yellowapple 6y ago

> Slow and sustainable growth may increase short-term survival chances, but guarantees that you lose in the long-term. I'm arguing the exact opposite: that slow and sustainable growth is exactly how you maximize long-term success. And there are very, very few markets that are truly "winner-take-all". They only seem that way because everybody's doing the exact thing against which I'm warning: trying to emulate and catch up to already-big players instead of carving out their niche and playing the long game. > If Instagram or AirBnb didn't plan for rapid scalability, and focused on short-term sustainability instead, they'd almost certainly be footnotes. Statistically speaking, they'd almost certainly have been footnotes anyway. That's the nature of startups that pursue VC-powered hypergrowth: you're counting on a heck of a lot of luck. (And not that I'd be complaining much if those companies were footnotes, either; AirBnb in particular has done a great job of exacerbating housing crises around the world, and Instagram - like most social networks - seems to rely entirely on throwing every dark pattern imaginable at its users, even before Facebook bought it. Good riddance to the both of 'em.)