Being on the right side of crazy

It's common startup wisdom that you need to be relentlessly resourceful in the pursuit of growth, and doing so may take many years and lots of schlep before success at scale. What is less well understood is how you go about systematically pursuing traction and how you determine product strategy (as opposed to product development). This post touches generally on this latter topic.

One of the best things I've read this year is Rob Go's Path to Victory post, which finally entitled something I've been asking entrepreneurs (and myself) for a long time: what does success look like in the next few years if all goes well, and what needs to happen for that future to unfold? That is, what is your path to victory?

It's really a short-form and focused business plan. As an example check out Chris Dixon's plan for SiteAdvisor. While it's true business plans aren't generally read by investors, a succinct explanation of your path to victory can secure financing quickly. It takes the form of a story that can be put in a pitch deck.

Your path to victory should be on the right side of crazy.
There is some crazy in there. You want to be ambitious enough so when you first start out and you tell people what you're doing the initial reaction of most people is that you're a bit crazy for taking it on in the first place. Then you know you might be onto something big in the same way good ideas are often dismissed as toys.

The wrong side of crazy is when the probability of success is too low for your risk appetite (and for investors if you want and seek them). Laying out your path to victory helps assess the magnitude of that probability.

A common issue is believing that something plausible is true. It's not. Yes, plausible things can create good stories, but underlying them are one or more assumptions that have associated probabilities of occurring within a given time frame. It is your job when constructing your path to unpack those probabilities in the context of your particular time frame.

I don't want to overstate the quantitative nature of this exercise. I think you should have a spreadsheet with your plan assumptions, but at the same time everyone (including yourself) should recognize your quantitative assumptions probably have huge error bars. In fact, you can plan for that in your spreadsheet with bad/good scenarios and more systematically with sensitivity analysis and scenario planning.

A related issue is a path that relies on larger market movements, especially mass changes in consumer behavior. Such changes can create empires, but they can also be hard to time if they haven't started snowballing yet in earnest. Countless entrepreneurs (including myself) have been too early to products by many years. You can combat this problem by being a world-class expert in the changes you think are about to occur, but it is very hard to not have cognitive dissonance when doing so. It is much easier to pursue an existing large market, or one that has already started trending.

Another issue is what Josh Kopelman called the Domino Rally Business Model, where success relies on a series of independent things happening (dominoes falling) in your favor. The problem is since they are all independent events and you have to have all of them to be successful, your overall success probability is the multiplication of the probabilities of each of the dominoes. So if there are four things that need to happen and each are 50/50 you are now at a success probability of (1/2)^4 or about 6%. The chicken and egg problem is a subset of this issue.

Perhaps the best way to construct a useful path to victory is to put more focus on pursuing traction early on. The better you understand your customers (the first step being to get some), the easier you can articulate how many of them there are, how to reach them and how to monetize. Those are in essence the underlying questions you're answering in a path to victory (although you may choose to put off monetization in that path).

Being on the right side of crazy is having a path to victory that is probable and yet ambitious enough to have maximal impact when you succeed. Great paths allow you to incrementally make progress on them and build to inflection points where you get step function growth. Worse paths require large periods of time with no progress until you hit those inflection points (ex. the Domino Rally).

The funny thing is when you take a step back the growth curves in the success case of both these paths look similar. That's because inflection points make s-curves and the difference between slow growth and flat growth before and after the step ups are not very distinguishable on first glance.

But there is a big difference in there. Things that are growing (albeit slowly) have data flowing back to you. This data makes it easier to tweak your path to victory to ensure you actually get to victory.


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I'm the Founder & CEO of DuckDuckGo, the search engine that doesn't track you. I'm also the co-author of Traction, the book that helps you get customer growth. More about me.