Growing from a founder to a scale-up CEO is challenging. Thinking up game changing ideas couldn’t be more different to running a large business. Many transitions are required along that journey but the one that I’ve been thinking about recently comes when the first product starts to take off. To simplify, before then success comes from trying lots of things, but after that success comes from making one thing work.
Creativity is the main skill required in the first phase. It’s all about coming up with lots of ideas and seeing which ones have merit. It’s a time when the options seem limitless and new ones are opening up all the time. Conversations with customers and other industry players frequently go off on tangents revealing new opportunities and adding to the sense of upside. It’s all about getting a few irons in the fire and founders often have a growing belief that at least one of the ideas will work out, even if they aren’t sure which one.
Then one of the ideas starts to work. Customers are buying and levels of excitement and optimism grow still further.
We are now into the second phase. The onus has moved from trying lots of things to making one thing work, and that requires a very different mindset.
The first thing that’s required is focus. It’s difficult moving from adding irons to the fire (and feeling good about the security that brings) to taking irons out of the fire to focus on something that is promising but still unproven. For many founders giving up on the optionality of having lots of horses in the race is hard, and that’s despite the fact that ideas put on the backburner at this point can be re-ignited later. The difficulty isn’t rational. Everyone understands the benefits of focus from an intellectual perspective, but in practice many find it very challenging emotionally. Buckets of self belief play a part here too – most great founders believe they are snowflake special, which is great, but that confidence can give them the excuse to think that whilst everyone else should focus, they are good enough to keep all the options alive without compromising on delivery. I’m here to say that’s rarely the right strategy.
The second thing that’s required is discipline. The fun creative process of dreaming up new user flows and product features gives way to disciplined experimentation. For an ecommerce company or marketplace that means analysing the whole funnel from marketing spend through to checkout, looking where people fall out, and experimenting with fixes. Many good companies run regimented experiment programmes with a weekly cadence. Every seven days they identify a metric they want to move, develop a hypothesis on how to move it, implement an experiment to test the hypothesis, and then kill or roll out depending on the result.
Moving from adding irons to the fire to taking them out and from creativity to discipline is quite a shift. Writing this post has got the transition clearer in my mind. I hope it’s helped you too.