Startup Journal: Is Explosive Growth Really the Goal?
Everyone wants to achieve explosive growth. That's what a startup is all about!
It's a new business trying to rapidly take control of a market. Explosive growth is in the definition of a startup! Obviously that's the goal, right? To grow as quickly as possible?
That's something you have to do in order to make it, but I think we often get too caught up in the idea. I get too caught up in it, at least.
We're all trying to build a baby brand from scratch. We need to grow it quickly in order to compete, but it also takes time to become a real player.
How to Approach Explosive Growth
Like every other entrepreneur, I've read through dozens, probably hundreds, of articles and first hand accounts of people who've done it before. VC's, entrepreneurs, developers, advisors. They all roughly share this same piece of advice.
A startup isn't a get rich quick scheme. It's not an anything quick scheme!
It's not even a get rich scheme, for that matter. A startup is about building a leading, sustainable business. That takes time. And the shared mindset from all of these experts is that the amount of time it takes is about 7 years. (Tweet this!)
I've seen as low as 3 and as high as 10, but that seven-year time frame shows up over and over again. It's almost overwhelming, isn't it? 7 years of risk, uncertainty, potential poverty - and even then you might not make it!
What Does "Explosive Growth" Look Like?
Airbnb is a classic example, if for no other reason than how long it took them to be of any value. Their idea sprouted in 2007, and they officially launched in 2008 at SXSW, which sounds like an amazing opportunity!
They got two bookings.
The founders actually made and sold spoof cereals during the 2008 Presidential Election - Obama O's and Cap'n McCain's - to earn their first bit of funding, $30K. In 2009, they got $20k from Y Combinator.
At this point they're two years in, and they've got a total of $50k and sweat equity to show for it. That's it.
They made a bunch of changes, learned how powerful photos are (and how much money they can bring in), and by the end of 2009 they'd closed a $600k seed round with Sequoia, the cream of the VC crop.
In 2010, Airbnb had an A-round of $7.2 million. In 2011, they had a B-round of $11.2 million.
Several rounds of funding later, as of August 2016, Airbnb is valued at $30 billion. That's insane!
That's explosive growth. But the first 3 years were anything but explosive.
One of America's favorite and most valuable startups took four years to reach unicorn status, with almost all of that coming after the first 3 years.
Their first 3 years sucked! But they kept going, and I think that's what we need to keep in mind as we're grinding day-in and day-out, trying to build our own unicorns. Here's where it gets practical.
Making it Practical
The startup world is all about hype, and it's very easy to get caught up in that hype.
So-and-so comes out with this new innovation or huge partnership. Someone closes a $10 million round. Companies get awards and start getting featured everywhere.
We want to be a part of that. We want those stories to be our stories. It becomes so easy to let the macro influence the micro! For these big stories to alter how we would normally work - how we should normally work.
Explosive growth is something that will happen if you continue doing the right things in the right way. But it shouldn't be a goal in and of itself, not starting out at least.
If you go into your startup with the mindset of "I have to do something that grows exponentially today," you'll fail.
Building a startup is a long, 7-year ordeal. Short-term goals are great for morale and investors, but they distract you from the big picture.
It's okay to take several weeks to figure out the right next step. It's good to go about your processes with a long-term focus. If you go into a startup with the mindset of "I have to achieve explosive growth today," you never will.
Look at Airbnb. It took them 3 years to start growing explosively. That's common! It takes time. It takes putting the right components in the right places, and then being patient.
Explosive growth will be a byproduct of making the right decisions over time. It's not going to come immediately. (Tweet this!)