Refinement Revenue

Modern startup advice is to launch and grow revenue as quickly as possible, as aggressively as possible.

This advice isn’t wrong. But it isn’t right, either. Stripe took two years to get to a full launch. Notion and Airtable took double that. All of these companies are valued at over $1 billion dollars. What gives?

There are a few subtle things going on here I’d like to flag. Both specific to revenue growth, and to advice in particular.

Advice on Advice

Advice is often a double-sided marketplace for braindead people. The Advice Giver is usually an established, busy person. They have a lot of meetings. They have their own problems (which might be the same as yours, by the way). The Giver isn’t really thinking about your business. They’re pattern matching. The Giver will often give you the advice that comes with the most cognitive ease. The simplest advice, instead of the most correct advice.

The Advice Taker is often equally misguided, hoping to load six months of context into someone’s mind in 30 minutes. Six months of blood, sweat, tears, thoughts in the shower, dreams, rejection, acceptance, and hope. In 30 minutes. Once you stuff their CPU with all your data, you’re hoping they crunch it and return given you The Answer, like a computer from a Douglas Adams novel. Exciting. The Taker isn’t really seeking the perfect answer, because they know in their heart-of-hearts it doesn’t exist. The Taker is seeking status, recognition, and inspiration.

And so this dynamic leads to the following exchanges:

>> Should we be focusing on fixing our bugs, or growing?
You should focus on growth. Growth is good.

>> My team wants to hire this person I think is bad. What should I do?
Fire them!

>> We don’t have enough users. What should we do?
Thanks for asking. Having spent 60 seconds thinking about your business, here’s the idea I think you should implement.

Once in a while, you meet Givers that are truly awake. Someone who is aware of the game. Good responses look like this:

* Why are you even asking me this? Should this really be your focus?
* What’s the answer you thought I would give you? Why are you here, really?
* Why don’t you feel comfortable doing this yourself?
* I can’t decide this for you. Here’s a relevant story from my experience: [...]

Answers like these usually mean someone is really thinking about the interaction instead of just going through the motions.

Refinement Revenue

Hopefully this explains my earlier point. Growing revenue is the easiest advice to give, not the best advice to give. What you really want is to make the most desired product as quickly as possible. You need a North Star to guide you in that direction. Without any gravitational pull, you’ll float into the deep space of startup death. But like Apollo 11 slingshotting itself around the moon, you can use different planets at various stages to orient your success.

For example, you might want to focus on finding just 10 customers to use your product this week. Once you have those 10 users, your “revenue” metric is “refinement”. How quickly is your startup changing in response to feedback from those users? (Ideally the feedback loop should be daily if not weekly.) How engaged are they in spending time with you? Focus on these questions until you feel like you’ve plateaued. Great. Now that you’ve found a fanbase, try focusing on revenue and charging them. You might find you’re not quite there. Rinse, repeat.

This is a very achievable goal. You can take your first step without writing a line of code. Just English.

Be Fascinating

If you’re doing enterprise sales, your opponent is all of the other priorities your Buyer has. That’s a lot. Good buyers are usually busy. Making headway in the modern war on attention is hard with a limited budget, but you can leverage this to your advantage. This environmental stressor forces you to refine your product message until it’s maximally potent.

Get good at cold outbound. Craft a subject line and email that have 20% conversion rate. Include an animated GIF. If email is the wrong format, send handwritten cards to your customers. Whatever is needed. Once you get one hit, meet them. Understand their problems and behaviors, and use that to expand. It’s much easier to learn from users that like your product than chasing attrition.

Find the Frontier

The biggest “moat” a startup can develop is learning a secret about the world few people know. You discover the secret by talking and iterating with users. You’re looking for the coordinates to the oil well, your geologists are your users. Extract the intel by talking to them. A Google Doc detailing product-market-fit is ten times more important than any algorithm you can craft.