This is officially the second half of the year. Saying that the first 50% of 2020 did not go as planned is an understatement. Many of us had goals, dreams, and projects which didn't happen. Some have struggled to just survive.
If you are reading this: congrats, you made it so far! Whether you have achieved your goals or not, whether your projects worked out or not—be kind to yourself. Those are extraordinary circumstances. In such a chaotic context, nobody is expecting anyone to be a productivity wizard.
And if you have…shut up ;-)
To (hopefully) a little saner six months ahead in 2020!
Today's topics include
Company Growth: Kindle vs. Fire Strategies
Ideas Are Just a Multiplier of Execution
🧠 Personal Growth:
The Fine Art of Opportunism
Kindle vs. Fire Strategies
In his recent article The Kindle and the Fire, Eventbrite’s CPO Casey Winters explains how he thinks about growth. He argues that most founders and marketing teams miss to adapt their growth activities to the stage of the company.
Thereby Casey discerns between two types of growth strategies:
non-scalable strategies to get scale and (kindle strategies)
scalable strategies (fire strategies)
Kindle Strategies → start a fire
The main objective here is to get the company to a stage where sustainable practices are actually possible. In the extreme cases (and if the war chests are full), companies like Postmate run aggressive paid search and promotion ads where they deliberately loose money in order to get both sides of a marketplace to a sustainable network effect. At this stage the customer life time value (LTV) only plays a small role. He also illustrates this strategy with the example of Superhuman (the subscription email client). They do live calls or live meetings with almost any new person who signs up. This approach is obviously not scalable, but they do it until their LTV increases or they improve their self-serve on-boarding. This is not a new idea, Paul Graham's "do things that don't scale" has made waves as far back as 2013 all through the Silicon Valley and beyond. This strategy is NOT SUPPOSED to be sustainable and efficient, its supposed to be quick.
Fire Strategies → keep the fire burning
On the contrary, fire strategies NEED TO be sustainable. They are responsible for building a long-term profitable business. Casey suggests that before we think about what kindle strategy we choose, we need to think hard what kind of fire strategy we actually want our business to grow by over the longterm. He writes:
There aren’t that many fire strategies. Those that involve network effects are generally the best. Sales, paid acquisition, virality, and user generated content with a scalable distribution channel are the most common ways to create sustainable loops to either scale a network effect or scale a product that doesn’t have network effects. There just aren’t that many ways to scale, and almost all involve having extremely good retention as well. Otherwise, you won’t have the profit in the system to invest in sales or paid acquisition, or you won’t get enough users to invite or create content to attract more users.
Now it's not always an either or, the two strategies can also work in tandem. Take SEO for example. While part of the marketing team is working on creating and ranking content over the long-term, unscalable kindle strategies can be applied in order to show quicker growth and to keep above water and then sequence them into scalable strategies. The key takeaway from this article is to recognize that both strategies have to be applied in context by the stage of the company or project you are trying to grow.
Ideas are Just a Multiplier of Execution
We heard it all before, Edisons famous quote:
Genius is 1% inspiration and 99% perspiration
So bluntly put, ideas by themselves are pretty much worthless, execution is what really counts and moves the needle. I see this play out in my own life every day of the year. And the more you zoom in time out the more this paradigm holds true.
That's why I loved Derek Sivers recent take on this:
To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.
To make a business, you need to multiply the two. The most brilliant idea, with no execution, is worth $20. The most brilliant idea takes great execution to be worth $20,000,000. That’s why I don’t want to hear people’s ideas. I’m not interested until I see their execution.
I just love this. It makes the truth of Edisons statement so blatantly obvious. And when you look around it's a fairly common phenomenon to observe!
🧠 Personal Growth
The Fine Art of Opportunism
Check out this brilliant article by Venkatesh Rao of Ribbonfarm.
What is Opportunism?
Opportunism is about working with and manipulating luck, not waiting for it. It is about engineering your path through life in such a way that the probability of disproportionate-returns events in your life is increased. You actually navigate by steering towards uncertainty and positive disruption because you know that your life is otherwise headed for ordinary outcomes.
Or in other words: “Luck favors the prepared mind.” The prepared mind sooner or later finds something important and does it. So yes, it is luck. The particular thing you do is luck, but that you do something is not.
How to be more opportunistic:
Daydream more about stuff.
Focus on areas that are intersections of things you are good at.
When you find an interesting rabbit hole, go really deep.
When you realize it is high leverage, you have to go all in.
I have grossly shortened and summarized these steps, please go read the whole article, it'll be worth it!
That's it for this week.
Enjoy your weekend 🏡
See you next week,