by Sam Altman11/22/2016
Startups are defined by growth, but growth isn’t step one in building a great company. If you focus on trying to grow before you make a product people love, you are unlikely to succeed.
We’ve said this before, but it’s worth repeating–many founders hurt their companies by focusing on growth too soon.
I’m not saying don’t grow at all–getting people to use your product, even in its earliest form, will help you better understand what your customers want. But focusing too heavily on growth before you’ve built something people love leads to the leaky bucket problem. You can get users to come in the door, but they don’t stay, and likely won’t return.
If you first make sure your product is loved, it will be much easier to grow. Users will be easier to retain, and they’ll tell others about what you’ve made. Your users essentially become a free marketing and sales force for you. Your chances of building a giant company are much higher when you have a product that spreads by word of mouth.
Facebook, for example, had a product people talked about obsessively from the start. Airbnb slogged for 1000 days before discovering how to make their product loved. Once they had that, it grew exponentially by word of mouth, and that still continues today.
This is true for enterprise and hard tech companies, too– your sales process becomes much easier when word has spread that what you’re making is great.
If your product isn’t loved, you might get early users, but growth will get hard later on. You’ll have to rely on inorganic means like ads, marketing, or PR to maintain your growth, and this gets very hard to sustain. And the larger you grow, the harder it becomes to course correct. Once your company is a big moving battleship, it becomes really hard to be nimble and quickly make the aggressive changes you need; your range of options becomes limited.
So, if you’re already growing a company around a mediocre product, fix it now. Don’t try to avoid the problem by raising capital for growth– the problems will still be there, with higher expectations.
And if you’re just starting out, take the time to build a product your users love, no matter how long it takes. When they actively recommend your product to friends, you’re in the right place. 1
1 Net Promoter Score can be a good way to measure user love too. ↩
Sam Altman is the CEO of OpenAI. He was the president of YC from 2014-2019. He studied computer science at Stanford, and while there, worked in the AI lab.