Lenny's Podcast: Product | Career | Growth
00:54:18 · Anish Acharya, Lenny Rachitsky
[00:54:18] S1: Yes. Yes. Give me a channel for my ambition, a channel for my fulfillment, and then a thing to do when I'm not doing everything else. [00:54:27] S0: That makes sense. Okay. The other question I have for you along these lines is there's so many companies and so many startups, so many products everyone's launching. The speed at which companies and products are shipped is 1,000X-ing. How do you think about durability and moats when you look at a startup? Because a lot of founders get that question. Everyone's getting that question. "How am I not a rapper?" What are signs that tell you this might be a durable thing?
00:54:54 · Anish Acharya
[00:54:54] S1: Well, I think there's two important ideas. One is something that Jesse from Decagon said, which I love, and that is that moats are most often discovered, not designed. I think it's really easy, I've done this as a founder, to get in your own head about, "Hey, I need a business plan that survives scrutiny from MBAs and VCs. I've got to have some really sophisticated idea of what my moat will be." And for that team, they just started shipping and it developed over time. Another great example of this is Cursor. They were criticized a lot for not having a moat, but it turned out that initially being a high NPS DAU product was really good. And over time they captured all the reasoning traces, they trained their own models, the Composer 1 2 models, and so on and so forth. We know how that story plays out. So moats can be discovered, they don't have to be designed is one. And then, I think the other is that we seem to have forgotten that the classic moats, none of the classic moats are based on how hard it is to make the software. We're not building self-driving cars, most of us aren't. So it's network effects, it's scaled advantages, it's brand effects, proprietary sort of data or what was historically called a cornered resource. Every moat from five years ago generally is still a good moat. We just need founders that have ambition in those directions. We need more multiplayer products, we need consumer social, we need products that get dramatically better the more you use them like Town, so on and so forth.
00:56:15 · Lenny Rachitsky, Anish Acharya
[00:56:15] S0: So, still read Hamilton Helmer and all that stuff still applies? [00:56:20] S1: Yes. Love his book. [00:56:22] S0: Yeah, he's been on the podcast. [00:56:23] S1: What? [00:56:23] S0: Yeah. [00:56:23] S1: I got to watch that. Yeah. [00:56:23] S0: It was recent. [00:56:25] S1: I feel like there's only five real business books in the world, every other one is in the business of selling business books and they're fake, and his is on my list of five. [00:56:34] S0: Are there any other on this list that come to mind real quick while we're on the topic? [00:56:37] S1: Oh, I mean, the two that are so obvious are High Output Management, which is like that is as good as it ever was. And then Ben's book. Hard Things is, it was the first emotionally honest book about business that was ever written, and that's why founders love it. That's why I love it, because you read it and you're like, "Wow, I'm not the only one that's anxious and feels like a failure, and can't tell anyone what I'm going through." Ben went through it too. [00:57:01] S0: Two of the most mentioned books on this podcast, turns out. [00:57:04] S1: I'm not surprised. [00:57:05] S0: So on this moat idea, so say you're a founder and you're putting a pitch together, trying to pitch you or other VCs, what's the best way to talk about a moat? Can you just say, "We're going to discover it. We're not sure. Nobody really knows yet"?
00:57:05 · Lenny Rachitsky, Anish Acharya
[00:57:05] S0: So on this moat idea, so say you're a founder and you're putting a pitch together, trying to pitch you or other VCs, what's the best way to talk about a moat? Can you just say, "We're going to discover it. We're not sure. Nobody really knows yet"? [00:57:19] S1: Yeah. I think that we would happily take a bet on a product that doesn't have a "moat" or durability story if it has a lot of momentum, a lot of craft, a lot of growing engagement. It's actually a thing I've learned over the years, I used to be very worried about people stealing my idea, but I've learned that the big ideas are always supported by a dozen small ideas that are invisible. And even if somebody replicates your big idea, they never see the small ideas that make the big idea work. So, I actually think that there's just something special in the water with certain products that make them incredibly successful despite extraordinary competition. I mean, look at Granola. Two years ago it was really criticized, and I don't know that they have a super strong durability story today, and yet it is beloved and dominant. I listen to what the customers are saying more than what the business books say. [00:58:11] S0: You get a free year of Granola if you become a subscriber to Lenny's newsletter. I should do this more often when it's part of this product pass, lennysproductpass.com. Get a free year of all these amazing products, including Granola. I just saw Ramp put out a report of the fastest growing companies according to their data, and Granola is number two or three.
00:58:11 · Lenny Rachitsky, Anish Acharya
[00:58:11] S0: You get a free year of Granola if you become a subscriber to Lenny's newsletter. I should do this more often when it's part of this product pass, lennysproductpass.com. Get a free year of all these amazing products, including Granola. I just saw Ramp put out a report of the fastest growing companies according to their data, and Granola is number two or three. [00:58:28] S1: It's a tremendous product. The craft is really high. [00:58:31] S0: Yeah. I think about that a lot these days because there's so much, there's Cowork, there's ChatGPT Work, there's Cursor, there's Grok Bot, and it's crazy how quickly one can switch from one to the other. And the underlying model is not that different. All it really is, most of it is the harness/UX of the product. And so to me, that tells you there's so much opportunity in the actual user experience being a moat, or at least giving you a lot of time to find something that is durable. [00:59:01] S1: 100%. And I think for the people that are at the edge, they pay for all of them because they all have the respective areas of specialization. [00:59:08] S0: Yeah. I have many $200 a month plans right now. [00:59:10] S1: I know, I know. Right. So it's a little painful, but yes, me too. [00:59:14] S0: And I think Cursor has a $300 a month plan now. [00:59:17] S1: So does Grok. Oh yeah, you're right. Yeah, that was the Grok plan. [00:59:20] S0: Yeah, Grok slash- [00:59:21] S1: Yeah, it was Grok Heavy.
00:59:21 · Anish Acharya, Lenny Rachitsky
[00:59:21] S1: Yeah, it was Grok Heavy. [00:59:22] S0: Yeah. RIP Cursor, I think they've transitioned away from that brand. Something I've been talking a lot about is the distribution. I call it distribution is new moat, but it's always been a moat. But it feels like more and more that is actually a massive advantage because everybody is ... There's 1,000 launch videos a day. Everyone's launching, launch, launch, launch. And really the ability to get your stuff into people's feed, get them continue to be reminded of your products feels like increasingly is powerful and important. Thoughts on the rising value of existing distribution being a big lever for growth and success.