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The Myth of Fast Growth

• 2 min read

Most startup advice is generic and useless. After advising 100+ startups, here is what actually works when everyone else is chasing vanity metrics.

#business-strategy#founder-advice#growth-hacking#profitability

I watched a promising startup burn through $5M in 18 months chasing hockey-stick growth.

They had 500% year-over-year user growth. TechCrunch wrote about them. VCs were circling for the Series A.

Six months later, they shut down.

Here's the uncomfortable truth I learned advising 100+ startups: Most startup advice is generic and useless. The real path to success looks nothing like what the thought leaders preach.

The "Growth at All Costs" Myth Is Killing Startups

Every founder has heard the gospel:

  • "Blitzscale or die"
  • "Growth solves all problems"
  • "Get to product-market fit, then pour gas on the fire"

This advice made sense in 2012 when money was free and valuations were fantasy. Today? It's a recipe for failure.

The graveyard is full of fast-growing startups:

  • Homejoy (house cleaning): $40M raised, 100 cities, dead in 3 years
  • Sprig (food delivery): $57M raised, "hypergrowth," shut down overnight
  • Munchery (meal kits): $125M raised, expanded to 5 markets, collapsed

They all had one thing in common: negative unit economics hidden by growth.

Why Growth-First Fails

The math is brutally simple:

Customer Acquisition Cost (CAC): 100CustomerLifetimeValue(LTV):100 Customer Lifetime Value (LTV): 80 Loss per customer: -$20

Scale to 10,000 customers = 200,000burnedScaleto100,000customers=200,000 burned Scale to 100,000 customers = 2,000,000 burned

Growth doesn't fix broken unit economics. It amplifies them.

The Profit-First Approach Nobody Talks About

Here's what actually works: Get profitable with 100 customers before you scale to 1,000.

I call it the "Boring Bootstrap" approach:

The Framework

  1. Charge from Day One

    • No free trials longer than 14 days
    • No "we'll figure out monetization later"
    • Price at 3x your costs minimum

  2. Obsess Over Unit Economics

    • Track CAC religiously
    • Know your gross margins by heart
    • Cut anything that doesn't directly drive revenue

  3. Grow Only What's Profitable

    • Reinvest profits, not VC money
    • Scale channels with positive ROI
    • Let competitors burn cash on unprofitable growth

Real Example: Tuple vs. Screenhero

Screenhero (the VC path):

  • Raised funding early
  • Focused on user growth
  • Burned through cash
  • Sold to Slack in a fire sale

Tuple (the profit path):

  • Bootstrapped from day one
  • Charged $25/user from launch
  • Grew slowly but profitably
  • Now doing millions in ARR with 3 people

Same market. Same product category. Completely different outcomes.

Addressing the Objections

"But Profitability Stifles Innovation!"

Bullshit. Constraints drive innovation.

Profitable and innovative:

  • Basecamp: Profitable for 20+ years, still shipping new features
  • Mailchimp: Bootstrapped to $800M revenue before selling
  • Atlassian: Profitable from year two, now worth $50B+

When you can't throw money at problems, you're forced to think creatively.

"But Investors Want Growth!"

Wrong investors.

The best investors understand that sustainable growth beats unsustainable growth every time. They're looking for:

  • Proven unit economics: You make money on each customer
  • Efficient growth: Low CAC, high retention
  • Capital efficiency: You've done more with less

A profitable company raising Series A is 10x more attractive than a money-losing rocket ship.

"But What About Network Effects?"

Even network effect businesses can start profitable:

  • WhatsApp: 50 engineers, 1/yearsubscription,soldfor1/year subscription, sold for 19B
  • Craigslist: Still profitable, still dominant, still ugly
  • Plenty of Fish: One guy, profitable from day one, sold for $575M

Network effects are about retention, not growth at all costs.

The Implementation Guide

Ready to buck the trend? Here's your playbook:

Week 1: Face Reality

  • Calculate your true unit economics
  • Include ALL costs (salaries, overhead, support)
  • If you're losing money per customer, stop everything

Week 2: Fix Your Pricing

  • Survey your best customers about value
  • Test 2-3x price increases with new customers
  • Grandfather existing customers (for now)

Week 3: Cut Ruthlessly

  • Cancel all "nice to have" tools
  • Pause unprofitable marketing channels
  • Focus only on what drives revenue today

Month 2: Double Down on What Works

  • Identify your most profitable customer segment
  • Find more customers exactly like them
  • Say no to everything else

Month 3: Reinvest Profits

  • Take your profits and test new channels

  • Hire only when it directly increases revenue

  • Keep unit economics as your North Star

The Uncomfortable Truth

Most startups die because they run out of money, not because they grew too slowly.

The myth of fast growth has killed more companies than any competitor ever could. While everyone else is burning cash chasing vanity metrics, you can build something sustainable.

Your choice is simple:

  • Join the 90% chasing growth and failing
  • Join the 10% building profitable businesses

The startup world needs more boring success stories. Maybe yours can be next.

Three things to do this week:

  1. Calculate your unit economics (the real ones)
  2. Identify one unprofitable growth channel to cut
  3. Test a price increase with 10 new customers

Is growth really worth sacrificing the long-term health of your company?

I already know your answer. Now go prove it.

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