10 ms·

The Only Way to Grow Huge

190 points by runesoerensen 13y ago

eberyvody 13y ago
yep, if you want your product to succeed, it has to be a really good product... why do people think this article is so great? isn't what altman says common sense?
jsnk 13y ago
This is not necessarily true for social apps where number of active users are actually a feature. Your app itself might be great, but if you don't have active users, say good bye to ever growing big. This is also true on the contrary. If you happen to have started some service before others (Craigslist, dare I say Hacker News), even though the app itself might not be as good, because of the people you have on the site, it will win out against superior apps that have smaller number of people.
- cconger 13y ago
  I think this is a little bit of a trap. Sure the number of people on the service are a feature and almost a meta-feature since it usually enables or multiplies the fun of other features. However the real value is number of active people on the service (which you did write). Those people were enchanted before I, as a new user, showed up. Therefore there is some orthogonal benchmark of quality or delight is required. These features I believe are what make someone get excited and share your app which then makes it amazingly social and draw in "the good people"
- brc 13y ago
  You have to look at it at a different level. Build something customers want is implicitly 'something they want more than the current options they have'. If the thing they don't have is clearly inferior, then no problem. This applies to completely new ideas. When you have a site like Facebook or Craigslist which has very large network effects, to bust into that you have to produce something people want more than those. That is a very difficult - though not impossible - thing to achieve.
cconger 13y ago
I agree with this firmly and have often doubted if it made me a naive "non-marketer". When discussing with marketers I would often point to the idea that our funnel was already resulting in so few long term customers, why would we spend money to pour more people into such a tiny funnel? I think a really good and "enchanting" (to steal from another front-page article) first impression is necessary particularly when demoing to end users due to the large amount of products they're being bombarded with on a daily basis. So while I agree with your overall stance, I'm worried about the implied advice to wait until your product is good enough. Since the phrase by definition is difficult to assess otherwise everyone would succeed.
pak 13y ago
> All companies that grow really big do so in only one way: people recommend the product or service to other people. This is a bad opening premise. Time Warner and Comcast are huge and they don't seem like word of mouth companies to me. Boeing is pretty huge and they don't sell anything directly to ordinary consumers. I would never run around marketing Pfizer products to my friends. Take a scan down the Fortune 500 and "viral" growth companies are in the minority. Even limiting yourself to tech companies, which I presume is all that the author was thinking of, the principle is no less general. Epic is a gargantuan EHR vendor and they grew via acquisition of other vendors, not word of mouth. Cisco did much of the same, and consider Oracle. The list goes on and on.
- droid_w 13y ago
  Right. I suspect the post is mostly valid to "consumer" type companies.
- deleted 13y ago
  [deleted]
- lwf 13y ago
  He explicitly excludes monopolies, like TW and Comcast.
  - dmazin 13y ago
    This comment needs to be stressed. Altman's article simply doesn't make it clear enough that he's excluding companies such as Time Warner. Military contractors are a whole other issue, of course.
    - gk1 13y ago
      A more realistic title, "Here's One of Many Ways a Some Companies can Grow, or Not", probably wouldn't have made the front page. This is a few paragraphs mentioning a fairly obvious point about growing companies, but trying too hard to seem groundbreaking.
  - bananacurve 13y ago
deleted 13y ago
[deleted]
JacobJans 13y ago
This reminds me of an article I recently read in the Harvard Business review. "The Three Rules for Making a Company Great." The three rules are basically: 1. Increase Revenue 2. Increase Quality. 3. Only rules 1 and 2 matter. I've following these rules since I read about them, and I do think they are very, very, helpful. Even though we grow mostly through direct response marketing, our brand value has been increasing, as has readership loyalty and revenue per unique subscriber. We are starting to get to the point where we're producing the type of quality that nobody else produces, anywhere. This easily solves one of the biggest marketing questions: What is your unique position? Eventually, the answer will be simple: We're simply better than all of our competitors. By a lot. http://hbr.org/2013/04/three-rules-for-making-a-company-truly-great/ http://hbr.org/2013/04/three-rules-for-making-a-company-trul...
johnrob 13y ago
One major exception: distribution. You can also grow big off the backs of other companies. In the tech world, this has become fairly common in the advertising space. Retargeting companies, for example, can grow quickly by signing up only a few large e-commerce sites. It's worth noting that in this scenario you often don't see regular monthly growth. Instead you get huge spikes when new customers/partners are on-boarded.
jmduke 13y ago
This is a great article, but really only applies to a small subset of companies for whom organic growth is the only way to grow huge. An abbreviated list of counterarguments: Epic, CenturyLink, NBC, Waste Management, Honda, Vanguard.
- nostrademons 13y ago
  Honda and Vanguard absolutely grew through word of mouth, and NBC probably did too but it was before I was born. I compare notes with friends when buying a car, and people are not shy about recommending Honda or Toyota. Very few of them recommend GM or Ford. I also heard about Vanguard through word-of-mouth, where everybody gave the general advice that indexing funds are much more sane than other investing systems, and Vanguard was the leader in that space.
  - jmduke 13y ago
    This doesn't really contradict your point, but I was more thinking about the arc from 'small to huge', not the arc from 'huge to ginormous' -- after all, how did Vanguard become the leader in the space? Honda competed on price and efficiency to secure government industrial contracts; for Vanguard's first five years its only investors were institutional[^1], where their success laid much more in being a (massively successful) niche fund that no other firm offered than having any household success. Other commenters have argued that repeated success in an RFP environment comes from reputation (and thus word-of-mouth), but I think that's stretching too far from the original thrust of the article. [^1] I read this in a book but Wikipedia says that its first index fund in 1976, was available to individual investors, so I'm not 100% on this.
- CCs 13y ago
  Epic still keeps winning "Best in Klas"[1] which is based on user vote. [1] http://www.klasresearch.com/Vendor/54 http://www.klasresearch.com/Vendor/54
DonPellegrino 13y ago
Not true for marketing-oriented companies that grew huge by having a really good salesforce and managing to become the go-to name in slow, bureaucratic markets such as governments.
rebelidealist 13y ago
Good marketing and advertising can cover up a bad product. A prime example is GoDaddy. When their product is not growing like it should, Silicon Valley startups always hire more engineers to add more features. Oftentimes, the product is good enough they just need put in more marketing efforts. It almost feels like marketers and business dev people are second rate employees compare to engineers when their job is could be more important after the initial launch.
- tvladeck 13y ago
  An alternate take, using your example: good marketing and advertising can make a bad product good. In GoDaddy's case, by reaching a segment of the market that is unaware of the options. For this segment, it's not GoDaddy vs. Namecheap; it's GoDaddy vs. not knowing how to put up a website.
chasing 13y ago
Really? Plenty of sub-standard products do huge business despite higher quality competitors. Microsoft is only the most obvious example in the software world.
sjtgraham 13y ago
Looking at the comments here, most of them would be nullified if the article wasn't "the only way to grow huge", but instead "one way to grow huge". So far it's looking like this item will soon incur the controversy penalty. I enjoyed the post; simply making something good is the growth strategy that is most applicable to a random kid reading this, but it's not the only way.
- pak 13y ago
  The controversy penalty would be perfect for an article like this that features and builds off a linkbait title, which I now feel a little duped for reacting to. But after finding out Sam Altman is a YC partner, and reading more about how the controversy penalty and other arbitrary penalties actually work, I don't really buy into anything scoring equitably on this site (https://news.ycombinator.com/item?id=6844169 https://news.ycombinator.com/item?id=6844169) in the long term...
manishsharan 13y ago
This is grossly simplistic view of the world. Enterprise sales does not work this way at all. And no financial company/banker will recommend your super-duper product to anyone; in fact, some purchasing officers will ask you to NOT sell your product to their competition before they consider buying from you. In industrial supplies business, some factories require you to not sell their product to anyone one else in their target market region.
- sjtgraham 13y ago
  > in fact, some purchasing officers will ask you to NOT sell your product to their competition before they consider buying from you. Which companies have become huge by doing that?
mmuro 13y ago
There's a lot to this that rings true. I think the core idea here is that growing slowly, with your customers, is how you get big. In those early days of running a business, spending money on marketing is no way to guarantee new revenue. Word of mouth almost always is. Plus, it's a hell of a lot cheaper.
LetMeListen 13y ago
I agree with his initial premise that a good company - that offers a good product - first becomes well known through word of mouth. That is a given for any situation, hype will, whether false or not, bring people to your door steps; what you present to them afterwards is another story. But having them visit/try your product for the first time is essential.
midhir 13y ago
Read this with interest earlier. Personally, I think the author is spot on. We've been launching a new product quietly, building a simple landing page[1] that asks subscribers to tweet or share the page by email after they enter their business name/email. I thought I was wasting my time but didn't want to just leech away the engagement. The very first business that signed up immediately brought others. We hadn't even got a prototype yet, it's how we framed the problem and offered a solution that made it compelling enough to share. OK, it's important to make it easy to do so but if you're not compelling who'll bother? I wish I'd done this the first time round. Of course not every business in every industry can do it with social media but the principle applies. Looking at some of my friends launching businesses in competitive sectors I immediately started wondering how they could do it and, if not, why they weren't already. I suppose it's good peripheral validation as well. If your product isn't enough to make people talk what can you do to make it so? 1: http://events.shiftdock.com http://events.shiftdock.com
pg 13y ago
Note to Sam: It's possible to anticipate ways HN readers will misunderstand you, and tweak what you write to pre-empt them. It takes some practice, but I'd guess I'm now able to do it maybe 3/4 of the time. In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size they don't have to rely on making something great to grow bigger, but that if you look back at the earliest history of those companies, you'll find most did. I usually put these pre-emptive replies to probable misunderstandings in footnotes, because I don't want to clutter the text with things that are obvious.
- pdog 13y ago
  Even Microsoft (presented as a possible counterexample) had a great relationship with developers in the early years that sustained its incredible growth.
  - coldcode 13y ago
    Where would MS be today if not for the luck of Digital Research turning away IBM? Maybe wind up like Lotus or Ashton-Tate?
- adwf 13y ago
  Now put it in an algorithm that detects any mention of "only, always, never" or any other absolute. Then insert a boilerplate at the top of such discussions, saying there are always exceptions, but the gist of the argument is still valid ;)
  - deleted 13y ago
    [deleted]
  - jacques_chester 13y ago
    I can't help but feel that if fuzzy logic was taught more widely in computer science courses, people would be more sanguine about "only, always, never" as linguistic qualifiers. ... not that I am without guilt on this ...
DustinCalim 13y ago
> All companies that grow really big do so in only one way: people recommend the product or service to other people. Yeah, I recommend all my friends to get Exxon gas and buy GE lightbulbs... There are some things essential to us(inelastic), and those are the things where we'll see really big changes-- Invent things that everyone uses all of the time, not something that some people use some of the time.
ilovecookies 13y ago
then there is starbucks...
ivankirigin 13y ago
At the recent growth hacker conference, essentially every speaker dedicated time to idea that product quality matters. I certainly did when talking about the Dropbox referral program. You can see a version of my talk here: https://www.youtube.com/watch?v=ECvLsimoSjU https://www.youtube.com/watch?v=ECvLsimoSjU
arbuge 13y ago
"When you are still small, you can spend a lot of money marketing or advertising and have a big impact on usage growth. But eventually, you get so big you simply can't spend enough money to move the needle..." Well, that depends. Specifically, it depends on how scalable your advertising channel is. If your customer acquisition cost through that channel remains below your customer lifetime value, the only limit on your scaling is the working capital you have available to spend on advertising. Advertising can take you a very long way in some cases.
kevinalexbrown 13y ago
I wonder why. There are plenty of ways to get growth, why is this one so important? I can think of one reason off the top of my head: Perhaps it's because many organizations that grow very large do so by creating a market, or largely shaping it in some way. It seems that in that case, word of mouth is even more important. As an example, I tell my friends about gyro food trucks all the time. But most of them have decided whether or not they're going to eat greasy falafel. On the other hand, if there's a new type of food vendor they've never heard of before, it will count for a lot more, because their opinion hasn't been formed yet. I suppose the other explanation is that word of mouth is only a signifier of high quality, but I'm not sure that's all of it.
arthuredelstein 13y ago
> Having a growth team is still a good idea--you almost always need to jumpstart things. But don't forget about what you actually have to accomplish. Maybe it's better not to jumpstart things. One strategy could be to fail faster by purposely not marketing, to quickly find out whether a product is intrinsically viral.
- gk1 13y ago
  Most products are not intrinsically viral, and they have no reason to be such.
deleted 13y ago
[deleted]
conductr 13y ago
Author mentions _product_ a few times without consideration to the problem it's meant to solve. Sometimes the problem being solved just isn't big/important enough for users to risk the social capital of making a recommendation; even when the product solves it perfectly
iterative 13y ago
I was really hoping for some viagra jokes.
cbsmith 13y ago
The real magic is: customer acquisition cost < customer lifetime value Now, one way to get there is referrals. But other ways to get there is to have a product good enough that at least you get repeat customers, and still yet another way is to find a way to cheaply acquire new customers through advertising/marketing/distribution channels/etc (i.e., "growth hacker" route). That last one is pretty hard to sustain if your product is "bad" but might work if your product is "ok". The other two require varying degrees of positive customer experiences. Generally the tried and true way to get the job done is to build a product that reliably gets return customers to maximize customer lifetime value. Then you continually reinvest every dime you've got on sales/marketing to drive out that fast growth to give yourself advantages of scale as quickly as you possibly can. This tried and true approach works better where you aren't in a market where you are constantly reinventing your product/company (i.e., not the tech business). For tech companies, the referral approach is the easier one to pull off. So while I wouldn't entirely disagree with the article, I think as a consequence of perhaps being overly focused on tech, it's under appreciating the value of a proper marketing & sales strategy.
egfx 13y ago
Am I the only one arriving at this article thinking it was about working out?
- theorique 13y ago
  "Bro, do you even lift?" :)
  - egfx 13y ago
    I do now
abenga 13y ago
There was an interesting article in the Harvard Business Review way back that seems to agree with this: http://hbr.org/2003/12/the-one-number-you-need-to-grow/ http://hbr.org/2003/12/the-one-number-you-need-to-grow/
prottmann 13y ago
But many companies have good / excelent products and services and nobody now them. If the companies grow you are absolutely right, but what did this companies do that they grow ? That is the crucial question. I think there are many services like Dropbox before Dropbox exist, but nobody now them.
coofluence 13y ago
Sam is only highlighting an aspect of a company making it big. This is a multivariate problem with no single trick for solving it.
eved1973 13y ago
I am new to HN, and excited to be here, but the level of nitpicking with this point is horrifying. Sam's message is clear: you want to get big, get good. Can we really argue with this? Is it really worthwhile to fight over the semantics of "only" or "best" etc. If you want to get big, make sure you have a good product. (My personal extrapolation of this is that if you have a product that grows big on hype in the beginning, even if justified, but your product doesn't continue to meet growing expectations, someone new is going to enter the market and shake things up (maybe again). So stay good, and make it really difficult for someone to compete.)

190 points by runesoerensen 13y ago

yep, if you want your product to succeed, it has to be a really good product... why do people think this article is so great? isn't what altman says common sense?

jsnk 13y ago

This is not necessarily true for social apps where number of active users are actually a feature. Your app itself might be great, but if you don't have active users, say good bye to ever growing big. This is also true on the contrary. If you happen to have started some service before others (Craigslist, dare I say Hacker News), even though the app itself might not be as good, because of the people you have on the site, it will win out against superior apps that have smaller number of people.

cconger 13y ago
I think this is a little bit of a trap. Sure the number of people on the service are a feature and almost a meta-feature since it usually enables or multiplies the fun of other features. However the real value is number of active people on the service (which you did write). Those people were enchanted before I, as a new user, showed up. Therefore there is some orthogonal benchmark of quality or delight is required. These features I believe are what make someone get excited and share your app which then makes it amazingly social and draw in "the good people"
brc 13y ago
You have to look at it at a different level. Build something customers want is implicitly 'something they want more than the current options they have'. If the thing they don't have is clearly inferior, then no problem. This applies to completely new ideas. When you have a site like Facebook or Craigslist which has very large network effects, to bust into that you have to produce something people want more than those. That is a very difficult - though not impossible - thing to achieve.

cconger 13y ago

I agree with this firmly and have often doubted if it made me a naive "non-marketer". When discussing with marketers I would often point to the idea that our funnel was already resulting in so few long term customers, why would we spend money to pour more people into such a tiny funnel? I think a really good and "enchanting" (to steal from another front-page article) first impression is necessary particularly when demoing to end users due to the large amount of products they're being bombarded with on a daily basis. So while I agree with your overall stance, I'm worried about the implied advice to wait until your product is good enough. Since the phrase by definition is difficult to assess otherwise everyone would succeed.

pak 13y ago

> All companies that grow really big do so in only one way: people recommend the product or service to other people. This is a bad opening premise. Time Warner and Comcast are huge and they don't seem like word of mouth companies to me. Boeing is pretty huge and they don't sell anything directly to ordinary consumers. I would never run around marketing Pfizer products to my friends. Take a scan down the Fortune 500 and "viral" growth companies are in the minority. Even limiting yourself to tech companies, which I presume is all that the author was thinking of, the principle is no less general. Epic is a gargantuan EHR vendor and they grew via acquisition of other vendors, not word of mouth. Cisco did much of the same, and consider Oracle. The list goes on and on.

droid_w 13y ago
Right. I suspect the post is mostly valid to "consumer" type companies.
deleted 13y ago
[deleted]
lwf 13y ago
He explicitly excludes monopolies, like TW and Comcast.
- dmazin 13y ago
  This comment needs to be stressed. Altman's article simply doesn't make it clear enough that he's excluding companies such as Time Warner. Military contractors are a whole other issue, of course.
  - gk1 13y ago
    A more realistic title, "Here's One of Many Ways a Some Companies can Grow, or Not", probably wouldn't have made the front page. This is a few paragraphs mentioning a fairly obvious point about growing companies, but trying too hard to seem groundbreaking.
- bananacurve 13y ago

deleted 13y ago

[deleted]

JacobJans 13y ago

This reminds me of an article I recently read in the Harvard Business review. "The Three Rules for Making a Company Great." The three rules are basically: 1. Increase Revenue 2. Increase Quality. 3. Only rules 1 and 2 matter. I've following these rules since I read about them, and I do think they are very, very, helpful. Even though we grow mostly through direct response marketing, our brand value has been increasing, as has readership loyalty and revenue per unique subscriber. We are starting to get to the point where we're producing the type of quality that nobody else produces, anywhere. This easily solves one of the biggest marketing questions: What is your unique position? Eventually, the answer will be simple: We're simply better than all of our competitors. By a lot. http://hbr.org/2013/04/three-rules-for-making-a-company-truly-great/ http://hbr.org/2013/04/three-rules-for-making-a-company-trul...

johnrob 13y ago

One major exception: distribution. You can also grow big off the backs of other companies. In the tech world, this has become fairly common in the advertising space. Retargeting companies, for example, can grow quickly by signing up only a few large e-commerce sites. It's worth noting that in this scenario you often don't see regular monthly growth. Instead you get huge spikes when new customers/partners are on-boarded.

jmduke 13y ago

This is a great article, but really only applies to a small subset of companies for whom organic growth is the only way to grow huge. An abbreviated list of counterarguments: Epic, CenturyLink, NBC, Waste Management, Honda, Vanguard.

nostrademons 13y ago
Honda and Vanguard absolutely grew through word of mouth, and NBC probably did too but it was before I was born. I compare notes with friends when buying a car, and people are not shy about recommending Honda or Toyota. Very few of them recommend GM or Ford. I also heard about Vanguard through word-of-mouth, where everybody gave the general advice that indexing funds are much more sane than other investing systems, and Vanguard was the leader in that space.
- jmduke 13y ago
  This doesn't really contradict your point, but I was more thinking about the arc from 'small to huge', not the arc from 'huge to ginormous' -- after all, how did Vanguard become the leader in the space? Honda competed on price and efficiency to secure government industrial contracts; for Vanguard's first five years its only investors were institutional[^1], where their success laid much more in being a (massively successful) niche fund that no other firm offered than having any household success. Other commenters have argued that repeated success in an RFP environment comes from reputation (and thus word-of-mouth), but I think that's stretching too far from the original thrust of the article. [^1] I read this in a book but Wikipedia says that its first index fund in 1976, was available to individual investors, so I'm not 100% on this.
CCs 13y ago
Epic still keeps winning "Best in Klas"[1] which is based on user vote. [1] http://www.klasresearch.com/Vendor/54 http://www.klasresearch.com/Vendor/54

DonPellegrino 13y ago

Not true for marketing-oriented companies that grew huge by having a really good salesforce and managing to become the go-to name in slow, bureaucratic markets such as governments.

rebelidealist 13y ago

Good marketing and advertising can cover up a bad product. A prime example is GoDaddy. When their product is not growing like it should, Silicon Valley startups always hire more engineers to add more features. Oftentimes, the product is good enough they just need put in more marketing efforts. It almost feels like marketers and business dev people are second rate employees compare to engineers when their job is could be more important after the initial launch.

tvladeck 13y ago
An alternate take, using your example: good marketing and advertising can make a bad product good. In GoDaddy's case, by reaching a segment of the market that is unaware of the options. For this segment, it's not GoDaddy vs. Namecheap; it's GoDaddy vs. not knowing how to put up a website.

chasing 13y ago

Really? Plenty of sub-standard products do huge business despite higher quality competitors. Microsoft is only the most obvious example in the software world.

sjtgraham 13y ago

Looking at the comments here, most of them would be nullified if the article wasn't "the only way to grow huge", but instead "one way to grow huge". So far it's looking like this item will soon incur the controversy penalty. I enjoyed the post; simply making something good is the growth strategy that is most applicable to a random kid reading this, but it's not the only way.

pak 13y ago
The controversy penalty would be perfect for an article like this that features and builds off a linkbait title, which I now feel a little duped for reacting to. But after finding out Sam Altman is a YC partner, and reading more about how the controversy penalty and other arbitrary penalties actually work, I don't really buy into anything scoring equitably on this site (https://news.ycombinator.com/item?id=6844169 https://news.ycombinator.com/item?id=6844169) in the long term...

manishsharan 13y ago

This is grossly simplistic view of the world. Enterprise sales does not work this way at all. And no financial company/banker will recommend your super-duper product to anyone; in fact, some purchasing officers will ask you to NOT sell your product to their competition before they consider buying from you. In industrial supplies business, some factories require you to not sell their product to anyone one else in their target market region.

sjtgraham 13y ago
> in fact, some purchasing officers will ask you to NOT sell your product to their competition before they consider buying from you. Which companies have become huge by doing that?

mmuro 13y ago

There's a lot to this that rings true. I think the core idea here is that growing slowly, with your customers, is how you get big. In those early days of running a business, spending money on marketing is no way to guarantee new revenue. Word of mouth almost always is. Plus, it's a hell of a lot cheaper.

LetMeListen 13y ago

I agree with his initial premise that a good company - that offers a good product - first becomes well known through word of mouth. That is a given for any situation, hype will, whether false or not, bring people to your door steps; what you present to them afterwards is another story. But having them visit/try your product for the first time is essential.

midhir 13y ago

Read this with interest earlier. Personally, I think the author is spot on. We've been launching a new product quietly, building a simple landing page[1] that asks subscribers to tweet or share the page by email after they enter their business name/email. I thought I was wasting my time but didn't want to just leech away the engagement. The very first business that signed up immediately brought others. We hadn't even got a prototype yet, it's how we framed the problem and offered a solution that made it compelling enough to share. OK, it's important to make it easy to do so but if you're not compelling who'll bother? I wish I'd done this the first time round. Of course not every business in every industry can do it with social media but the principle applies. Looking at some of my friends launching businesses in competitive sectors I immediately started wondering how they could do it and, if not, why they weren't already. I suppose it's good peripheral validation as well. If your product isn't enough to make people talk what can you do to make it so? 1: http://events.shiftdock.com http://events.shiftdock.com

pg 13y ago

Note to Sam: It's possible to anticipate ways HN readers will misunderstand you, and tweak what you write to pre-empt them. It takes some practice, but I'd guess I'm now able to do it maybe 3/4 of the time. In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size they don't have to rely on making something great to grow bigger, but that if you look back at the earliest history of those companies, you'll find most did. I usually put these pre-emptive replies to probable misunderstandings in footnotes, because I don't want to clutter the text with things that are obvious.

pdog 13y ago
Even Microsoft (presented as a possible counterexample) had a great relationship with developers in the early years that sustained its incredible growth.
- coldcode 13y ago
  Where would MS be today if not for the luck of Digital Research turning away IBM? Maybe wind up like Lotus or Ashton-Tate?
adwf 13y ago
Now put it in an algorithm that detects any mention of "only, always, never" or any other absolute. Then insert a boilerplate at the top of such discussions, saying there are always exceptions, but the gist of the argument is still valid ;)
- deleted 13y ago
  [deleted]
- jacques_chester 13y ago
  I can't help but feel that if fuzzy logic was taught more widely in computer science courses, people would be more sanguine about "only, always, never" as linguistic qualifiers. ... not that I am without guilt on this ...

DustinCalim 13y ago

> All companies that grow really big do so in only one way: people recommend the product or service to other people. Yeah, I recommend all my friends to get Exxon gas and buy GE lightbulbs... There are some things essential to us(inelastic), and those are the things where we'll see really big changes-- Invent things that everyone uses all of the time, not something that some people use some of the time.

ilovecookies 13y ago

then there is starbucks...

ivankirigin 13y ago

At the recent growth hacker conference, essentially every speaker dedicated time to idea that product quality matters. I certainly did when talking about the Dropbox referral program. You can see a version of my talk here: https://www.youtube.com/watch?v=ECvLsimoSjU https://www.youtube.com/watch?v=ECvLsimoSjU

arbuge 13y ago

"When you are still small, you can spend a lot of money marketing or advertising and have a big impact on usage growth. But eventually, you get so big you simply can't spend enough money to move the needle..." Well, that depends. Specifically, it depends on how scalable your advertising channel is. If your customer acquisition cost through that channel remains below your customer lifetime value, the only limit on your scaling is the working capital you have available to spend on advertising. Advertising can take you a very long way in some cases.

kevinalexbrown 13y ago

I wonder why. There are plenty of ways to get growth, why is this one so important? I can think of one reason off the top of my head: Perhaps it's because many organizations that grow very large do so by creating a market, or largely shaping it in some way. It seems that in that case, word of mouth is even more important. As an example, I tell my friends about gyro food trucks all the time. But most of them have decided whether or not they're going to eat greasy falafel. On the other hand, if there's a new type of food vendor they've never heard of before, it will count for a lot more, because their opinion hasn't been formed yet. I suppose the other explanation is that word of mouth is only a signifier of high quality, but I'm not sure that's all of it.

arthuredelstein 13y ago

> Having a growth team is still a good idea--you almost always need to jumpstart things. But don't forget about what you actually have to accomplish. Maybe it's better not to jumpstart things. One strategy could be to fail faster by purposely not marketing, to quickly find out whether a product is intrinsically viral.

gk1 13y ago
Most products are not intrinsically viral, and they have no reason to be such.

deleted 13y ago

[deleted]

conductr 13y ago

Author mentions _product_ a few times without consideration to the problem it's meant to solve. Sometimes the problem being solved just isn't big/important enough for users to risk the social capital of making a recommendation; even when the product solves it perfectly

iterative 13y ago

I was really hoping for some viagra jokes.

cbsmith 13y ago

The real magic is: customer acquisition cost < customer lifetime value Now, one way to get there is referrals. But other ways to get there is to have a product good enough that at least you get repeat customers, and still yet another way is to find a way to cheaply acquire new customers through advertising/marketing/distribution channels/etc (i.e., "growth hacker" route). That last one is pretty hard to sustain if your product is "bad" but might work if your product is "ok". The other two require varying degrees of positive customer experiences. Generally the tried and true way to get the job done is to build a product that reliably gets return customers to maximize customer lifetime value. Then you continually reinvest every dime you've got on sales/marketing to drive out that fast growth to give yourself advantages of scale as quickly as you possibly can. This tried and true approach works better where you aren't in a market where you are constantly reinventing your product/company (i.e., not the tech business). For tech companies, the referral approach is the easier one to pull off. So while I wouldn't entirely disagree with the article, I think as a consequence of perhaps being overly focused on tech, it's under appreciating the value of a proper marketing & sales strategy.

egfx 13y ago

Am I the only one arriving at this article thinking it was about working out?

theorique 13y ago
"Bro, do you even lift?" :)
- egfx 13y ago
  I do now

abenga 13y ago

There was an interesting article in the Harvard Business Review way back that seems to agree with this: http://hbr.org/2003/12/the-one-number-you-need-to-grow/ http://hbr.org/2003/12/the-one-number-you-need-to-grow/

prottmann 13y ago

But many companies have good / excelent products and services and nobody now them. If the companies grow you are absolutely right, but what did this companies do that they grow ? That is the crucial question. I think there are many services like Dropbox before Dropbox exist, but nobody now them.

coofluence 13y ago

Sam is only highlighting an aspect of a company making it big. This is a multivariate problem with no single trick for solving it.

eved1973 13y ago

I am new to HN, and excited to be here, but the level of nitpicking with this point is horrifying. Sam's message is clear: you want to get big, get good. Can we really argue with this? Is it really worthwhile to fight over the semantics of "only" or "best" etc. If you want to get big, make sure you have a good product. (My personal extrapolation of this is that if you have a product that grows big on hype in the beginning, even if justified, but your product doesn't continue to meet growing expectations, someone new is going to enter the market and shake things up (maybe again). So stay good, and make it really difficult for someone to compete.)