Lenny's Podcast: Product | Career | Growth
01:15:26 · Jason Cohen
Of course, we all know that's very hard, it's risky. I have sort of a framework that I use to think about that kind of expansion, which I'm happy to provide. I've also written it up, but I'm happy to say it right here. But usually you want to stay in the target market you're already good at and grow from there. But sometimes the whole point of the expansion is to change [inaudible 01:15:51] or add something where you're leveraging something else about the company that you have as an asset going somewhere else. So this is what this framework helps decide. But one way or another, you probably want to plant one foot into some strength or asset that you have, move the other foot, which is the risky part, but the idea is that, "Yeah, well, we have this big upside, so we're taking that bet," and that becomes a smart bet. Of course that's true for any of these things, but especially if acquisition channels are full and it's like we literally can't ask the marketing department, that's just not one of the choices, it almost forces us to start taking these more drastic bets to say, "Well, we got to do something and that's not one of them."
01:16:29 · Lenny Rachitsky, Jason Cohen
[01:16:29] S0: I just want to keep saying how awesome this advice is and how many people are going to benefit from... None of this is like, "Oh, I've never ever thought of any of this." It's just the very methodical sequence of questions you should be asking yourself to help you not just undo stalled growth, but also just come up with a bunch of great growth ideas. And this specific section, it makes sense. Somebody's discovered alpha in a growth channel. Say, [inaudible 01:16:56] just launched. TikTok just... There's like, "Oh, cool, what's the new thing? Okay, let's get there quick." And then you drive a bunch of growth, it's awesome. Eventually everyone's going to start doing that. And so you should assume everything that is working for you now will slow down. I missed your post on the elephant S-curve. What do you call it? The elephant curve? [01:17:15] S1: Yeah, elephant curve. [01:17:17] S0: Yeah, that's so real. It's not just this S-curve that will forever continue to drive win. It will actually dip and decline over time because other people discover it and start using it. [01:17:26] S1: Yeah. [01:17:27] S0: I love that. So the idea here is, and the classic advice is, whether it's an S-curve or an elephant curve, think about are you starting to approach the apex of that and start to explore other channels before you slow down or start to dip?
01:17:27 · Lenny Rachitsky, Jason Cohen
[01:17:27] S0: I love that. So the idea here is, and the classic advice is, whether it's an S-curve or an elephant curve, think about are you starting to approach the apex of that and start to explore other channels before you slow down or start to dip? [01:17:44] S1: Yeah. It's easy to hear stuff like, "Well, if marketing is full, do something else." And you go, "I know." But then you look at people's behavior and it's like, "Well, you're not acting like you know." So maybe it needs to be said in enough detail that you actually do something about it.
01:17:44 · Jason Cohen, Lenny Rachitsky
[01:17:44] S1: Yeah. It's easy to hear stuff like, "Well, if marketing is full, do something else." And you go, "I know." But then you look at people's behavior and it's like, "Well, you're not acting like you know." So maybe it needs to be said in enough detail that you actually do something about it. [01:17:59] S0: And it's important to note, this is a very hard problem. Most companies do not really solve this. Something worked for them and then it stops working and then like, "All right, well, we found something," and then it just kind of went away. There's a couple posts we're going to link to in the show notes that will help you come up with ideas that are all around new growth channels that are emerging. One is by Emily Kramer around ecosystems as a new growth channel. And there's a lot of really cool advice there around this kind of emerging combination of influencers and content and partners where it's your ecosystem that helps you grow. Basically, there's a quote from the head of growth at Wiz where it's like, "Why start with zero when you can start with 10,000?" essentially growing through someone with an audience already. And then there's going to be a post out by the time this comes out around ChatGPT's app store, which is going to let you submit apps. And that's a really interesting, potentially huge new growth channel for companies. So cool stuff happening there. So just to summarize, logo retention, pricing, NRR, marketing, channel saturation. What comes next?
01:19:04 · Jason Cohen
[01:19:04] S1: The last question is, do you need to grow? So okay, growth is stalled. And if we assume every question before has been answered in a satisfactory way, you could ask, "Hey, is that a problem? What do we mean by grow? What do we need to do exactly?" Now, of course, you should know these kind of things, the goals all the time. And again, obviously the answer could be once again, all new products. These other things where this company, when we say, "Do you need to grow?" if we define you as this product in this market and this company, the answer might be, "No, what we need to do is have a different product in a different market or a different thing," or you could change the word revenue. If you say, "Do you need to grow revenue?" You could change the word revenue and say, "You know what? What we could do is maximize profit instead of revenue now. We've been maximizing revenue, but maybe we maximize profit instead." And so this is a company like 37Signals or really lots of bootstrap companies who have hit some sort of limit and realize, "That's okay. The founders are getting paid millions of dollars a year in dividends and it's okay, but I don't have to get... In fact, if I got bigger, it might be an organization that I don't like or serving a market segment that I don't want to serve," or whatever. And so maybe growing forever isn't the goal actually, or growing revenue isn't. You could ask philosophically, why grow anything? Why isn't it just okay to have stasis? And we all have heard the phrase, "If you're not growing, you're dying." This is a classic company thing. Is that true or is that the kind of thing that investors use to make founders grow or try to grow even when they shouldn't? It might be, but I would submit that even at a bootstrap company that has other values and culture other than growth at all costs, that that phrase is still fairly relevant because if the company... But that phrase is still fairly relevant because if the company's stagnant for years, is that a great environment for everyone? As the founder, did you start this company in order to do the same thing every day? Is that why you did it? Is that fulfilling for you? What about everyone else? Nobody wants to further their career? They just want to do the same thing every day and never further their career, not really learn anything, not really innovate?
01:21:29 · Jason Cohen
Does it feel good to just not be growing? The answer could be yes. If I'm a CPA, and I have some clients, and life is good, the answer could be yes. I'm not dictating the answer here. I'm just asking because a lot of times, whether it's our careers, or as founders, our companies, a lot of times we've just been in the mode of, "Oh, I've got to grow, I've got to get promoted, I've got to do more, I've got my resume." We've got in that mode for so long, maybe our whole life, that I was going to say lose sight of, but maybe we never had sight of, "Wait, does this make me happy? Is this what I really want? Am I fulfilled doing this? Or even if I do have these goals, have I gotten stuck in a rut where my goal is growth and I don't know, more money, more everything, but I'm stuck in a rut here." Sometimes we forget to take a step back and go, "Wait a minute. Is this still right or do I need to turn the page and have a new chapter of life right now?" And so this question, do you need to grow, or if you're not growing, you're dying, well, for some people, no, they like doing the same thing forever. And that's great, actually. That's nice. But for many people, especially the kind of people who want to get into product, and build stuff, and innovate, and people who start companies, a lot of people like that are not the kind of people that want to just do rote things for 20 years. And so the not growing part, what I like to say is maybe the you in if you are not growing, you're dying is you, the person as opposed to you, the company. It's also you, the company. But what if we took it to mean you? If you are not growing, then in some sense, maybe for some people, you're dying. Maybe if you're listening to this, that's you. You're a shark and you got to go. And we all know people too, who claim they hate work or maybe they do hate work. Let's not say claim, they do hate work, but then they retire and kind of go downhill because they don't have a purpose or this, or that, and the other thing. In that case, it was true, if they're not growing, they're dying, literally. So again, I don't mean to overstate this, and I certainly don't mean to claim that there's some answer that's right for everybody, of course, but surely this is the right kind of question.