How Startups Plan For Billion-Dollar Success
You can’t copy someone else’s strategy and expect the same results
Don’t fall for the lure of the billion-dollar IPO.
If you are, like me, watching all these jaw-dropping entrances into the public markets and looking for common denominators that you can apply to building your own company, there aren’t any.
Whether you’re just starting out or you’ve already raked in a few million dollars of capital, the strategies, models, and methods that are going to launch you to your next level haven’t been invented yet. You can’t follow someone else’s playbook and expect the same results, not even some fractional equivalent of their success.
I’ve been building companies, products, and tech for over 20 years, and I can assure you there isn’t one set of singular strategies that makes the difference between a startup’s success and failure. I’ve never gotten to the same place the same way twice.
You need to write your own playbook for your own billion-dollar success. Let’s talk about how to do that.
Step away from the S1
I just spent three years working shoulder-to-shoulder with a brilliant entrepreneur who has taken one company public, has a couple more outsized exits, and is currently running one of the more innovative startups I’ve ever been involved with.
One of the things he likes to do is pore over pitch decks from companies who have raised loads of money, and also S1 filings from companies who have IPOd. He breaks those documents down, looking for interesting strategies, models, statistics, and trends.
I’ve started doing the same thing. These can be really eye-opening exercises that can help you formulate how the money side of the universe sees the opportunity side of the universe — or how the fuel gets into the tank.
But one thing he doesn’t do, I won’t do, and I encourage you not to do, is apply those exact same strategies or models that worked in concert with those exact same statistics and trends. Just because DoorDash was able to cash in on the pandemic doesn’t mean anyone can, or should, no matter what their numbers say about the explosive growth of home delivery.
You can and should learn strategies and even terms and language from companies that have found success doing something no one has done before. But trying to copy the model from a pre-existing success is a recipe for failure.
Use those successful strategies and models as a framework for how the system operates. Then leave that history behind, especially recent history, as soon as you’ve learned form it. Because in order to succeed, you’ll need to disrupt that system and rewrite that history.
You’re doing something that’s never been done before
Once you have a handle on the framework, your playbook needs to focus on what makes your company unique. Ironically, your strengths are likely going to be why what worked for a company like AirBnB isn’t going to work for you.
Play to your strengths.
There are three “statements” in the business world that get misused and overcooked more often than not: Mission, position, and problem/solution.
These are not posters to hang on a wall or filler for the first few slides of an investor pitch deck. These are the definitions, clarifications, and communication of your company’s unique strengths.
Your mission statement should not be a flowery re-wording of how your company will change the world. It should be a shot across everyone’s bow, describing how your company is innovating a particular sector of the economy. When you’re a startup, you’re mission statement isn’t a promise, it’s a threat. To the incumbents.
Your position statement isn’t an explanation of where your product fits amongst the current successful players. It’s actually the opposite. It’s a clarification of why your product is like nothing that ever came before it, and why it’s necessary for that evolution to happen now.
Your problem/solution statement doesn’t attack the existing solutions. Rather, it explains, succinctly, how your solution attacks the problem in a way that no one else is even attempting, let alone finding success with.
Your mission, position, and solution are your preamble, your context, your setting of the stage for all of your strategies, your methods, and your models to fall into place.
You’re at one stage and striving for the next, so you need a map
One of my favorite sayings about startup growth: You can’t get anywhere if you don’t know where you are.
The next few chapters of your playbook are going to be modeled on goals — short term, medium term, and long term. A lot of playbooks get short-circuited because trying to focus on today, tomorrow, and the multi-billion-dollar exit is not something the entrepreneur brain was meant to do.
The method I developed for visualizing and managing startup growth is something I call the Three Stories. It’s one of the first things I wrote for Medium.
TL;DR: Think about the entire lifecycle of your company as a television series: Story A is the episode: It’s what you’re working on and showing the world today. Story B is the season, and a bunch of episodes may tie together within a season and/or across multiple seasons. Story C is the entire series. Episodes hint at the conclusion of Story C, seasons move Story C forward, and the final episode is your exit.
Your playbook should document each of these stories like a writing team maps out the arcs of the episodes, the season, and the series. These stories are not projects, they’re not features, they’re not stages of investment. They’re your goals, but not in a wish-list sense. They’re documented quantitative plans for growth.
Fully document a number of episodes of Story A, but only work on one at a time. Loosely document several seasons, your Story B, and make sure each episode fits the continuity of the current season. Then very loosely document your Story C, and keep your eyes on the end goal.
When you finish each episode, go back to your Story B and Story C and tweak them based on what you’ve learned.
You’re success will be determined by how you scale
It’s incredibly difficult to write your playbook while you’re executing it — it’s the real-world version of building the car while that car is speeding down the highway. But having a solid, well-thought-out playbook can be the difference between scaling up and crashing down as the business moves faster and faster.
Some of the best leaders I know will admit that they don’t know why they lead well. Those leaders always seem to lead with greatness in good times and then fall into chaos in times of crisis. Scale brings crisis, and sometimes it will seem like constant crisis. Even if you are forced to drastically change your strategy, at least your playbook gives you the starting point from which to make those drastic changes.
In order to scale beyond your targets, you’ll need to experiment and stick with what works, and that can be maddening when you expect your results to conform to someone else’s. You can start experiments with someone else’s strategy, of course, but you’ll constantly need to verify the results based on your goals and modify that strategy based on your results. Scale requires trust in the data. Don’t stick with any strategy that isn’t verified by your own data.
Finally, don’t overdo it. Your playbook doesn’t have to be a 60-page manual on everything your company does. I like an outline to start, and then I can build from there.
And as for how you communicate your playbook, don’t just put a document on a shared drive and give everyone the link. Manuals get read once and thrown in the trash, if they get read at all. Choose the right medium for the right audience and the right venue. Sometimes it’s a deck, sometimes it’s a talk, sometimes it’s training, sometimes it’s none of those.
Just remember to always do what will work for you, not what worked for others, no matter how successful they were.
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