The Physics of Startups
00:15:16 · Rob Snyder
[00:15:16] S1: Yeah, so so okay, so the so the concept here is that those six things that are really easy to do to not grow as fast as possible, and they're in the inverted version, which is really hard to do, to minimize variation, minimize weights, compress everything, eliminate unnecessary steps, focus on what actually improves. All of those things are things that manufacturing thinking has focused on in extreme detail for the last hundred years. And so they just give us like they have gifted us all of this thinking. We should accept the gift. And so if you look at your startup as a factory, you can then apply manufacturing thinking to the factory. The important thing though is what the heck does this factory produce? And if you get that thing wrong, you're gonna be optimizing the entire factory for the wrong output. So, for example, common thing is everyone's talking about software factories. Software factory, on my business, I'm building a software factory, right? And it's like that's a subcomponent of the real factory that you're building. But everyone's asking them themselves the question like, how do I know the quality of the output of the factory? And it's like, yeah, you don't, because it's because it's a subsystem in a broader factory. And if you're thinking about lines of code or like the the production of a software factory has to refer to what customers care about. Is it delivering what customers are caring about? So that tells you it's a subsystem and a broader thing. If you just focus on revenue as the output of the factory, well, you can do a bunch of dumb things in pursuit of revenue that crush your growth in the end. And so we know it's not revenue. It and if we focus on revenue, right, we're not going to get that kind of continuous improvement that the the um minimizing waste that's not gonna happen by default. And so the structure of a factory here has to be what does a startup produce? It produces case studies, successful customers, and it produces case studies that are basically identical to one another. Yeah. Because we want to minimize variation. That's the whole point. We want to minimize variation, put a bunch of volume through the factory. As we are able to put more volume through the factory of nearly identical things that don't require us to like scramble around the factory, that's what increases our growth rate.
00:17:48 · Rob Snyder
It's the the output of the factory, the throughput of the factory is what matters. And so it produces case studies. And then there are steps of the factory that go from somebody not knowing who we are to being a case study customer. It's basically the entire customer journey are different steps in this factory. I think of three. First step is pipe one. How do we get people to talk to us or come to our website or whatever? Step two is sales. How do we turn potential customers into actual customers? Or how do they turn from potential customers into actual customers? Step three is delivery. How do we turn actual customers into customers who are successful, who renew, who don't churn, who tell other people about it, right? And that is, they become a case study at that point. And they should look just like our other customers. And those, and basically everything a startup does ladders up to that, that uh those three machines in that overall case study factory.
00:18:51 · RC
[00:18:51] S0: Let's let's take a couple pieces of this because it it took me time. I I think you introduced this concept to me two years ago, three years ago. Like I and it uh now I love it. I'm like medium addicted to it. It's how I think about my startup. Uh but uh at the same time, like it it took it took a while. So let's uh I want to hit those three machines, but first let's talk about a case study. Like my intuition about a case study was basically like came from consulting. It was like a slide that we we put in front of a new client to tell them that we had done this work before, so that hopefully they bought whatever it was that the partners were selling. Um you're referring to something specific with the case study. Um what what is it? And can you give us an example of uh an example or two of like what does a case study look like for a specific startup, or if you need to genericize it, you can?
00:19:49 · Rob Snyder, RC
[00:19:49] S1: Yeah, yeah. So a case study is um certain person at certain company was trying to do something right now for some reason. They considered their available options, and those options weren't good enough. So we offered them something that unblocked them, and as a result, they were able to do XYZ. That's the kind of rough structure of a case study. It's a story. Which people will recognize as pull. Like you've you've put pull into a package. Yes, yeah, yeah. It's it's basically pull, what we offer, so what? Um, and you just package that all together. That is a case study. It it just reads like a case study, it reads like a story. Um, and and yeah, and that is uh essentially the only piece of collateral you need. [00:20:41] S0: And it's uh the what you want from the case study is for a person to read case study or be told case study or see case study, whatever it is, and think that is me. I am the pre-part of the case study, and I want to get to the other end of the case study. And uh and they identify with the most important elements of pull, they understand the connection with supply that your product or solution, whatever it is that you're offering, and the outcome is the thing that they are trying to achieve. [00:21:12] S1: Yes. Yes. Yeah, okay. Yeah, so pull, how we help, and what's their unblocked life look like.
00:21:12 · Rob Snyder, RC
[00:21:12] S1: Yes. Yes. Yeah, okay. Yeah, so pull, how we help, and what's their unblocked life look like. [00:21:19] S0: And so how does uh like if I if I think about like that thing in a box, um the the goal is to, is it like, I don't know, conceptualizing this. I'm sorry, I'm gonna take this too far. It's like take new customer, put them in their own box and create a successful, like they they they purchase the solution, it's implemented, and they end up as the happy, yes, a new happy case study, basically.
00:21:44 · Rob Snyder
[00:21:44] S1: Customer shows up with pull, they show up with pull. That's the whole point of pull. Pull exists before your startup exists. They show up with pull as a potential customer in the pipeline step. We need some way to get them to show up, but that's the pipeline step. And they just show up. Up with poll, they say, here's what my poll is. Then we have sales, which is again basically what what I've been describing in sales is it it's just have them tell you what their poll is, describe what your supply is, and see if they pull or what they do. And you can use a case study as part of that. A lot of people do, but it's still just a case study that's like, here's other people's pull. Does this look like you? Yes. Here's what they wanted. Does that look like you? Yes. Cool. And then and then the sales process is just that. There's a little bit more nuance to it, but not that much. That's the essence of the sales process. And then once they've bought, okay, we know what outcome they are shooting for, right? We know what they're trying to do. We know what their unblocked life is because we talked about that in the sales process. And so it's just deading them there. And so we kind of go through the process. They sh it's basically pipeline is they show up with pull. Sales is we kind of show a case study of somebody who had poll who looks like them and what we did for them. And they say, Yeah, that's what I want. Delivery is we help them become that. Done.