Video Of The Week: Joel Spolsky at Startup School
The startup school talks are great. I've watched a bunch of them.
Joel Spolsky is the founder and CEO of our portfolio company Stack Exchange.
His talk is a great discussion of the difference between the "get big fast" strategy and the "organic growth" strategy. This is something every entrepreneur really needs to understand. We see a lot of folks pitching us to invest in "organic gowth" businesses and Joel explains why that is a mistake.
Here is his talk (sorry I can't for the life of me figure out how to embed the startup school talks).
Joel wrote his original post on the distinction between Land Grab and Ben and Jerry’s businesses back in 2000.http://www.joelonsoftware.c…It’s well-done, and fun to recall some of the old 1.0 businesses back then, e.g., Junglee, Jumo, AOL dial-up, etc., and the contrasts with some of the businesses in the talk today, e.g. Facebook, Kik, etc.
I didn’t hear him say “organic growth” was a mistake once, so I think you are looking at this with VC-colored-glasses. In fact, he makes strong arguments FOR organic growth if that’s what you want. The key being don’t straddle – decide upfront. I agree with that 100%. Even the AOL land grab argument crumbles (to much laughter) toward the end.Is get big fast great for founders and VCs? Absolutely. Though it’s not the only path and I’m really, really tired of the conversation being framed that way when it’s simply not true.#niche (Kid back me up!)
I think what Fred is implying is that you can’t invest your way into organic growth. Organic growth happens and each growth nuckle builds on the previous one.You can’t throw money at organic growth.
Right. I read it the wrong way. I have a visceral reaction to the get big fast is the only way mindset and my reaction incorrectly skewed my response. I still stand by what I wrote, just misinterpreted the message above.
the mistake is wasting time with VCs when you have an organic growth business
Are you saying an organic growth business doesn’t need “any” VC funding?
That’s what Joel says and I would tend to agree with him
Unless you play in a capital intensive industry.
That makes sense. i didn’t read it that way. my bad.
so if all take this message on board yesterday’s email problem will diminish.
The other message in the video is that Land Grab/Get Big Fast and Organic/Slower Growth are not mutually exclusive. At the end of the tape, he says that after 2 years of Organic Growth with Stack Overflow, it was time to go for a Land Grab so he raised money to do that.Is the reverse order true as well? Can you Grow Fast then use Organic Growth thereafter to solidify your growth over time?
I don’t think so
Joel’s large point about the problems of straddling the line between his two types of business is largely correct.My issue with the “Land Grab” terminology and some of the shortcuts he says that you should make — culture, throwing cash at problems, overlooking issues — could be interpreted by founders as carelessness.That distinction is not necessary or helpful.Certainly it’s important to have an attitude of “shipping code” and being mindful of time.But when you are creating a new market or motivating a new user behavior, it’s important to get it right and go slow in the beginning. You want to take the Ben and Jerry’s approach to providing a great experience/culture/etc even if you are in “Land Grab” mode.My preferred model is that you perfect the experience with a few transactions (that number differs based on the model). After you perfect it and make it irresistible, then you can scale it assuming your customers and users have underlying similarities.(We have an enterprise-oriented solution (very big transaction size) and aim for getting a dozen or so perfect experiences. My friends at Sidetour, which is customer oriented, probably need hundreds.)This philosophy is consistent with some great proven and up and coming entrepreneurs — Jobs, Dorsey, the AirBNB guys among them.It’s captured in a Jack quote:”If we can perfect one experience for one individual, we can scale to every single one of the 7 billion people now inhabiting this earth.”Brian Chesky:”Do things that don’t scale. We start with the perfect experience and then work backward.”
True, he over dramatized what to throw money at.Nail it before you scale it.
Wah, I can’t watch video on iPhone cuz Y combo is using flash playa. Guess I has to get outta bathtub and hop over to ma desktop. Itz ok I was getting raisiny anyway
I really enjoy hearing and learning from those who have gone through this process, appreciate these valuable snippets.In listening, a few things hit me – (1) There are differences (possible strategy conflict) between the visionary and principle partners points of view of with respect to what the business is capable of doing, and (2) Entrepreneurs tend to overstate or by nature, are overconfident with what they can achieve.Isn’t there opportunities for companies who think big, play small and scale fast once developed?
This was my favorite talk from this year’s startup school. He nearly convinced me that raising money would be a good idea.He mentioned that he was returning all of his profit from his other business to the employees (nearly doubling their salaries each year).I’m curious why he didn’t use those proceeds to finance StackOverflow’s land grab expansion.
The StackExchange concept is interesting – ultimately it’s very good for getting answers, but I wonder how good it is for stimulating learning and analysis. I’ve used that platform many times previously to find answers (have never posted) and the one thing that I’ve always felt is that once you go to StackExchange, you always need to return multiple times to truly overcome the problem you’re faced with.It’s like the old analogy of fishing. StackExchange is “giving me a fish”. It would be great to see some sort of partnership with some of the online learning tools, to foster not just answering questions but encouraging analytical thinking too. Ultimately it’s not one or the other – you need both in order to create value.
StackExchange’s editorial policy actively discourages subjective content (the kind of stuff you need to foster objective/analytical thinking).StackExchange is a good resource, and will no doubt continue to attract a gazillion eyeballs, but in terms of participation it’s all a bit blah now that the top ‘000 questions for a given subject have been answered; there’s not a lot of reason to hang out there.The forum is dead — long live the forum.
Need flashplayer.2005 called, they want their web movie format back.
i finally got around to watching that video. loved it!im especially encouraged by his notion that there is a very good chance to build a 10mm organic software business. ..and the discussion of his experience here is really good. what is especially cool about the video is that building an organic business doesnt preclude finding / doing the ‘get big fast’ type. ..and for fog creek trello might even be that! ( i love the trello ..have to figure out how to convince my corp bosses to allow its use for our little projects)
Yup, it put a smile on my face when I heard that it took him 2 weeks to raise the money he needed because all the chips were already in place before.
Yup. That’s why Joel’s talk is so important
True, with the caveat being to focus on one or the other and not straddle both strategies. But in the case of SE, they have so many forums now that some are probably in Land Grab mode while others are more mature and growing organically.
These distinction are of course, academic at their core.If you can’t show customer value and inklings of dynamics, all the pitches and funds won’t create a market.The question is not either or or which one to do when, its a matter of whether your model can accelerate to market scale with funding.Nothing else really matters.