Product Manager Skills by Seniority Level — A Deep Breakdown

Product Manager Skills by Seniority Level — A Deep Breakdown

Startup = Growth. This simple equation captures the essence of what it means to be a startup. In order to grow really big, a startup needs two key components: a big market and reachability. However, coming up with new ideas can be the hardest part. The best way to find new ideas is to identify those that have recently become viable due to rapid changes, particularly in technology.

A startup is not just any newly founded company; it is a company designed to grow fast. The driving force behind a startup is growth. Everything else that we associate with startups, such as innovation and disruption, stems from their focus on growth. To achieve rapid growth, a startup must create a product or service that appeals to a large market. This is what differentiates a startup like Google from a barbershop, which has limited scalability.

Successful startups possess a unique ability to see and solve problems that others cannot. Founders of successful startups often have a different perspective that allows them to identify opportunities that seem obvious to them but are overlooked by others. This is particularly advantageous for those who are both adept at technology and face problems that can be solved through it. The rapidly changing nature of technology often transforms bad ideas into good ones without anyone noticing, as exemplified by Apple's success with search when Google had already established itself as a dominant player in the field.

While the growth rate alone does not determine whether a company is a startup, it is crucial to consider the growth rate of successful startups. The ratio of new customers to existing ones is a more meaningful metric than the absolute number of new customers. A constant number of new customers each month indicates a decreasing growth rate, which is cause for concern. During the early stages of a startup, a growth rate of 5-7% per week is considered good, while 10% per week is exceptional. On the other hand, a growth rate of 1% per week suggests that the founders have not yet figured out their path to success.

The best measure of growth rate is revenue, followed by active users for startups that do not charge initially. Focusing on hitting growth targets every week compels founders to take action. In fact, the ability to act decisively is often the key to success, as strategizing without taking action is typically a form of procrastination. Founders' instincts about which path to pursue are often better than they realize. Just as Richard Feynman believed that following the truth leads to discovering extraordinary things beyond imagination, startups that prioritize growth often stumble upon remarkable ideas.

Growth is a compound interest in the startup world. A company growing at 1% per week will only grow 1.7 times in a year, while a company growing at 5% per week will grow 12.6 times. Slow growth can be particularly dangerous for startups with network effects, which are often the most successful ones. Raising funds allows startups to choose their desired growth rate, while also making them attractive to potential acquirers. Rapidly growing startups not only hold value but also pose a threat to established players, as they have the potential to encroach into their territory. Fear often drives product acquisitions.

Understanding growth is crucial to comprehending startups as a whole. Growth is the driving force behind every aspect of the startup world. Startups focus on technology because it is the most fertile ground for rapid change, which in turn creates opportunities for fast-growing companies. When you start a startup, you are committing to solving a more complex problem than traditional businesses. You are embarking on a search for rare ideas that have the potential to generate rapid growth.

In conclusion, the success of a startup hinges on its ability to achieve rapid growth. To maximize growth, founders must identify new ideas that have become viable due to recent changes, particularly in technology. Taking decisive action and maintaining a high growth rate are crucial. Here are three actionable pieces of advice for founders:

1. Embrace change and stay ahead: Continuously monitor technological advancements and adapt your product or service accordingly. Be open to exploring new ideas and be willing to pivot if necessary.

2. Act decisively: Procrastination can be detrimental to a startup's growth. Trust your instincts and take action. Remember, it is better to act and learn from mistakes than to remain stagnant.

3. Focus on revenue and active users: These metrics are key indicators of growth. Instead of solely focusing on acquiring new customers, prioritize retaining existing ones and increasing revenue per user. This will contribute to sustainable and scalable growth.

By incorporating these strategies into your startup journey, you can increase your chances of achieving rapid growth and success. Startups are not just about the initial idea; they are about the journey of growth and innovation.