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Unless you have 10,000 customers: Approximately no one knows who you are. Approximately no one knows your brand. Approximately no one knows your product. You can change everything, any time. Take advantage of that.

44 years ago, Michael Porter told us (in 𝘊𝘰𝘮𝘱𝘦𝘵𝘪𝘵𝘪𝘷𝘦 𝘚𝘵𝘳𝘢𝘵𝘦𝘨𝘺) there are only three main strategies: 1. Differentiated-best 2. Lowest cost 3. Niche Many strategic thinkers since have suggested that only the first two exist, and the third is a question of market scope/segmentation, or that “niche” is an enabling constraint to be “differentiated,” ie by restricting “for whom.” Perhaps even “lowest cost” could be seen as “best, along the dimension of price.” Which brings us to the crux of strategy: in what way are you differentiated-and-best, for whom? Because of course just being different for the sake of difference, doesn’t result in sales and love. It has to be “best” too. I’m not sure I like this as a final definition. For example, “best” doesn’t quite capture the products that people truly love, that build a community around, that associate that brand with themselves. I still like my “love, utility, coercion” framework rather than “best.” Still, “different, generating love and utility mostly, for a well-defined segment,” while a few extra words, feels great as our strategic goal, aka our “vision.” Then the actual strategy is the set of self-consistent (at least), self-reinforcing (at best) decisions about what we are and ARE NOT going to do, to achieve that goal. https://t.co/ijCTsdyQkh

“We’re in stealth mode.” Yeah, no shit. That’s the default mode. What, you thought TechCrunch set up surveillance outside your home office hoping to catch a glimpse of what’s on your screen? No one will care about you even after you “launch.”

Wow, I think Substack is trying to say this chart is good, but it's terrible for revenue growth. The unit isn't monthly revenue, it's _cumulative_ revenue. Which means they're not growing in revenue, or very slowly.

Investable startup: 1. Founder is unstoppable force of nature 2. Founder seeks disconfirming evidence, and changes 3. Serves niche inside a large and growing market 4. Customers genuinely love the product (high retention) 5. Employees genuinely love the company (high retention)

Paid advertising increases organic growth. I know that sounds wrong, and you can’t really measure it directly. But it’s true.

Two founders A and B start a company with 50/50 ownership. Two years later they raise $1M at $5M post from investor C who now owns 25%, and they create an ESOP (employee stock option pool) with another 20%, so (fully-diluted) the ownership levels are A=B=27.5%, C=25%, ESOP=20%. Two years later there’s an offer to sell the company for $20M. In just four years? Wow! Each founder can get $6M before taxes (because the ESOP isn’t fully allocated yet). But both the founders and investors see this as a signal of even bigger things to come, so they turn it down and forge ahead. Instead, they leverage this valuation validation to raise $5M at $20M pre from investor D, and C takes their pro-rata, and they and top off the ESOP at pro-rata as well, so now it’s A=B=15%, C=25%, ESOP=20%, D=25%. For the founders to get $6M pre-tax, they would now need an offer of $40M. No matter, we raised money to grow, and we’re growing, so let’s grow! Two years later things are still going well, so they raise $15M on $75M pre from investor E. TechCrunch is going to write about this for sure! C & D don’t take their pro-rata (better for founders!), so now it’s A=B=11%, C=21%, ESOP=17%, D=21%, E=20%. At this point the founders have gone through a lot -- six of the most intense and stressful years of their life, even if also fulfilling, so maybe they’d want more like $10M pre-tax in any sale, to feel good about the outcome. At their ownership level, that’s a $90M sale, but they just raised at $75, so the new investors wouldn’t get enough return at that paltry level, so that’s never going to happen. You can see the pattern. There’s no obvious off-ramp here. Either the company ends up as a unicorn, or… what? The founders (and employees) would have gotten the same money had they had sold long ago? Note that this is a very good-case scenario. The company grew at a healthy clip for 6 years. Every financing round was a normal valuation and a normal amount raised -- 20%-25% each time. Nothing unfair, no one “exploited” anyone. What do you do with that information? You could say: Never raise money. But I’m happy I did at WP Engine, and I’m happy we didn’t sell early in our company’s life when we had a good offer. (The numbers were, in fact, even better than the above scenario!) It’s not just “how much money did the founders get.” Life is the journey, it’s the people, it’s building things, it’s caring about something, it’s teams caring about the same thing, it’s happy customers, it’s people’s careers, it’s wealth for many instead of just the founder. Indeed, what I find most common in bootstrapped companies is founders with 100% of the equity, and upon sale, employees get nothing. Remember that the next time you’re tempted to point the finger at the VC’s as the greedy ones. Even so, is it weird or bad that investors have most of the equity, and thus get most of the money if the company is successful, despite spending 1/100th of the time working on the company than any one of its employees, to say nothing of founders? For that, you have to decide whether "risk capital" is logical or illogical. And, of course, whether you want to make that trade. It’s perfectly sensible to say: “I never want to get on that carnival ride. My ownership is my life.” It’s also perfectly sensible to say: “I want to build something large, impactful, meaningful, substantial, creating a legacy.” I’ve done both, and I’m happy to have done both. You can pick one, without wasting hours “hating” on people or systems that picked the other.

Reddit’s business model is weird: $800M revenue - wow! > 80% GPM - efficient! 55% revenue spent on engineering salaries - why? what features? -17% profit - WTF??? Something seems wildly off.

How do I 𝘬𝘯𝘰𝘸 that it’s 100x easier to make software than to understand customers, get their attention, and sell to them? Because I know 100 engineers who can build software for every 1 founder who got 100 people to buy something.

“Act as if you’re in total control of your destiny.” So the advice goes, after acknowledging how much of life is due to luck. I disagree. You need to pick strategies that work well specifically under conditions of both good and bad luck. Here’s a bunch of them, with examples: https://t.co/m2jIS9GH5a

Your failed startup DOES define you. It means you had the guts to try something, which means you're "a person who has the guts to try hard things,” which bodes well for the rest of your life. Now, embody that person, and continue to do gutsy things!

Google has a term "toothbrush product" for something you use 1-2 times per day. There was a rule for a while that they'll never make anything that's not a toothbrush product. Hence e.g. gmail, calendar, docs, and even the failed things like social media products. For SaaS, 𝘢𝘤𝘵𝘪𝘷𝘪𝘵𝘺 𝘧𝘳𝘦𝘲𝘶𝘦𝘯𝘤𝘺 might be a good substitute, i.e. do you use the product every day? Or at least multiple times per week? Because if yes, then presumably you'll continue with the monthly or annual payment, which is sufficient. But if it's not 𝘶𝘴𝘦𝘥 all the time, you 𝘮𝘪𝘨𝘩𝘵 start getting into trouble, depending on the product. If the product is supposed to help you reconcile monthly invoices, then it might be heavily used for 1 week / month only, and this could be completely fine. The worst are products that are only needed temporarily (e.g. for weddings or other life events) or obviate themselves (e.g. code optimizers where you don't need it for another 7 months after you fix the immediate issue). If you charge recurring revenue, you should deliver recurring value, at least as frequently as you charge, and ideally all the time.

To whom it may concern: Please, no more directories. Build something valuable that people want to pay for because it’s valuable. Sincerely, and with compassion, Jason.

Paid advertising increases organic growth. I know that sounds wrong, and you can’t really measure it directly. But it’s true.

Almost no successful SaaS company has a good accompanying social media account. Which means it's not only unnecessary, it might be irrelevant. Better question: What is the best way to market your SaaS?

I feel post-COVID a lot of people lost their motivation and energy. Not just founders, everyone. Globally. I can’t explain why specifically, and I don’t have data, it’s just my strong impression. Not sure how to fix it either.

What's the counter-argument to the claim that USD is spiraling out of control?

We’ve all heard that you should "sell benefits, not features" on home pages, landing pages, etc.. Is there data showing that benefits actually work better? Or only for some kinds of sales? Personally I skip past benes and look for features, but what’s the data?

Why are founders — especially engineers — allergic to interviewing customers? Afraid of the truth? Certain they “are the customer?” Don’t know how to do it, so just ignore it? Irrational confidence? Genuine ignorance? Introversion? Ego?

I still call it Twitter. I still think there are nine planets. I still like taking 𝘩𝘰𝘵 showers. Who wants to make a club? 😂

OK, we all need help on this. Let's help each other. At least 10 times in the past month, someone has said to me: >>> I want to talk to customers more, but they don't respond to requests for meetings, nor to surveys. What do I do? Pay them?? <<< Let's give ideas. I'll start:

I have a theory that it _typically_ takes 2 years to get to 1,000 _paying_ customers (at ≥$30/mo), even for companies who "hyper-scale." I'd love to test that with data. How long did it take you to get there? I'll go first:

When you work 50 hrs/week on something you love, and something you own, or something that contributes to a higher purpose that you’re passionate about, do you burn out? Or is burn-out as much about how you 𝘧𝘦𝘦𝘭 about the work, as the 𝘲𝘶𝘢𝘯𝘵𝘪𝘵𝘺 of the work?

You think -- or at least hope -- that the best product will win because of social media and reviews and Product-Led Growth and etc.. But Microsoft Teams is the most popular video conferencing software, and I'll bet the majority of their users don't prefer Teams to the competition. And although Workday has more seats than any other HR software, I'll bet you most Workday users don't like it. So I do agree that the first sentence is true in more cases today than ever before. And also that PLG and generally pleasing the end user is important and something that all product folks as well as designers need to keep in mind. But if you think marketing doesn't matter and that other forms of building a moat and other competitive advantages don't matter, you're wrong.

Reddit’s business model is weird: $800M revenue - wow! > 80% GPM - efficient! 55% revenue spent on engineering salaries - why? what features? -17% profit - WTF??? Something seems wildly off.

What are examples of products which are: 1. Inexpensive (maybe but not necessarily freemium) 2. Minimal design / not known for "great design" 3. Have an ecosystem of plugins/addons/integrations Leveraging extensibility rather than cohesive design. Like WordPress.

Don't work too hard building a startup. Jobs, Gates, Zuckerberg all had hobbies and weren't tethered to their computers. Levels doesn’t spend 11 hours/day coding and tweeting. Just relax and let the succeed come to you.

I know that "lists" and "how-tos" perform well on Twitter. I just can't do it. It's not me. I'll just grow slowly in a way that's authentic, and write articles for the deeper ideas. Is there a way to do "viral" things that aren’t that kind of stuff?