It’s a torturous chaos until it isn’t

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Jason

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When you talk about explosive, profitable startup growth, a few darlings come to mind. DropBox is one.

Hubspot is another. I mean, just look at their growth (published on SEOMoz):

Was it always so powerful a growth engine? Was it always so clear that this was a company with a bright future?

Looking back on stats they published in 2010, the curve is identical, just a different scale on the y-axis:

Or in 2009, when they published this to boast about how their revenue juggernaut is recession-proof:

Even going back in time, they seem unstoppable, their future inevitable.

But it was not always so. I’d like to zoom in on this point in the graph:

What was going on during those first six months? Was the future bright and shiny even when there was no impressive customer curve? When half the customers were just personal favors called in and new signups didn’t happen daily?

Or was it barely-controlled chaos, not able to sleep at 2:43am for worry about how to make payroll in seven months or whether the numbers would look good enough by next spring to raise another round? Unsure which products to double-down on and which to kill, and worried the wrong choice would tank the entire company? Staying bright and cheery on the outside for the press, customers, and even employees but with Damocles’ Sword hanging overhead?

Of course it was. It always is.

FreshBooks is another example. Here they are in 2007, justifiably proud of getting 138,000 sign-ups in 3 short years:

Founder Mike McDerment showed us the update at Business of Software 2011 — it’s identical in shape, except they just passed 3,500,000 users.

As an aside, they mention that “we didn’t have our first paying customers until month 2.” How do you think they felt before then? Or even in the six months after?

Of course the story is the same when the company “runs off a cliff without leaving skidmarks,” never having extracted a single dime from a single person. The same struggle, same uncertainty, same near-impossibility.

So how do you tell the difference between the chaos that leads to unthinkable success and that which leads nowhere at all?

I’m not sure you can.

Objectively, what’s the difference between Basecamp v1.0 and any number of knock-offs? All of them simple, all of them usable by relatively non-technical people, all of them web-based.

Objectively, what’s the difference between StackOverflow and the twenty copycat frameworks and thousands of copycat websites and forums? Why was Quora still able to stand out? Could you measure this difference? Could you put it on a chart?

You could say StackOverflow was fueled by giants of the technical online world, but that doesn’t explain Quora.

One thing you know for sure — what doesn’t explain it is a standard “feature comparison chart.”  If it’s a feature at all, it might be something subtle, like the exact game mechanics of StackOverflow or the boogers on my diff viewer.

But even that doesn’t explain it. Take Peldi, founder of Balsamiq Mockups. He blogged too, but unlike StackOverflow he didn’t have a head-start with an online presence, and English is his second language. He lives in Italy, not surrounded by an American startup culture to feed off. Prior to entrepreneurship he was a lifer at Adobe, so that didn’t especially prepare him for running a company from scratch.

Guess what his growth chart looks like? It’s like Hubspot and Freshbooks, but what’s more interesting is what it looked like during year #1:

How do you think Peldi felt during those first six months? Do you think the anguish subsided quickly? Or ever? Do you think Peldi was still sure his ideas and execution were good in June?

It’s not just startups. Here’s a letter George Orwell sent in 1948:

… The book is fearfully long, I should think well over 100,000 words, possibly 125,000. I can’t send it away because it is an unbelievably bad MS and no one could make head or tail of it without explanation.  …

… I am not pleased with the book but I am not absolutely dissatisfied. I first thought of it in 1943. I think it is a good idea but the execution would have been better if I had not written it under the influence of TB. I haven’t definitely fixed on the title but I am hesitating between NINETEEN EIGHTY-FOUR and THE LAST MAN IN EUROPE.  …

His book Nineteen Eighty Four is one of the most popular, most-quoted, most influential English-language books of the the last hundred years.

Of course your struggles might indeed be in vain; only time will tell. But this I do know:

The fact that you’re in over your head, that you almost cannot will yourself to continue, that you’re completely in the dark, that you’re working yourself to an early grave, that you seem to slide two steps back for every one forward, that nothing’s ever good enough, that that your friends and family can’t understand why you’re turning yourself inside out with no apparent progress, that you yourself doubt whether you’re even capable of this…

These things don’t mean you’re failing. It’s always like this, until it isn’t.

Discussion continues here.

64 responses to “It’s a torturous chaos until it isn’t”

  1. As a microprenuer going through all of this right now (lots of work, seemingly little “progress”, working myself ragged between a day job and night gig), your message is timely and inspiring.

      • Yes- I hear you! Entrepreneur, nursing baby, toddler, FT student and working myself ragged… but never happier at the same time.  Looking forward to 6 months in when I see the growth I believe is possible!

  4. Timely post Jason… Here’s the sales graph of one of the businesses I’m working on. It’s concepts like this post that keep me going!

    • “One of the businesses”. My feel is that if you ditch the rest and concentrate on this one it will take off.

      To quote a few other (much smarter) commentors : “Must Burn!”

      •  I take a little different approach… more of a diversified portfolio to reduce risk. Yes, it might slow things down a bit, but I feel like things are uncertain (Jason even says in this post that you don’t really know if it’ll take off) so it’s good to have a couple of these in the hopper. Might be an interested blog post for Jason…

  6. I agree with ”
    It always like this, until it isn’t “, but we shouldn’t forget that for the vast majority of startups the growth curve never takes off.

    Looking at the set of successful companies that struggled in the beginning while forgetting about those that didn’t make it is an example of a survivorship bias.http://en.wikipedia.org/wiki/Survivorship_bias 

  8. This is phenomenal. I had to read it about three times to fully grasp the truth here.  I’ve been a startup founder, and I’ve worked in 3 other startups.
    I feel compelled to paraphrase the infamous @FakeGrimlock:twitter when I say: If you CAN quit, you should.  But if you can’t, don’t.  Fire will sustain if it’s hot enough. You must burn.  

  9. Hi Jason  -Thanks for the great post. Can you explain (maybe in different post) how companies can sustain outstanding customer service in the SMB market? It seems that all enterprise companies provide bad service and only startup companies offer A+ service until they get more than few customer. Is this just the reality?

  11. Isn’t the message of this post something like “it will work out when it’ll work out, if it’ll work out?” :) I fail to see the hope. 

    • It’s not “hope” in the sense that “it will all work out in the end.”  Of course it doesn’t, often.

      At the same time, most people give up before it’s clear whether the company will succeed, because the beginning is really hard.

      Finally, it’s also a commentary on investing in early-stage companies. How much of a crap-shoot it really is.

  12. I suspect that some of the difficulty of predicting the success of a startup is the importance of ‘product-market fit’.   

    You can’t judge it by either the product or the market in isolation. That’s like trying to judge the value of a safe’s key by carefully studying its ridges*. Only the relationship between the key and the lock has value.  

    Even worse, as with this hypothetical locked safe, you can’t usually get a full sense of the value until you’ve found the fit!

    *Which look not unlike the sales charts of early startups, now that I think about it

  13. Yes, patience and determination are key to achieve success on anything! So, what are your thoughts about startups that “pivot” possibly sooner than they should because of a flat line in their graphs? 

    • I think you only know that in hindsight, and actually you don’t even know then, because you only see the result of one branch of that decision tree.

      A/B tests are experiments, but startup direction isn’t!

  14. I was really looking forward to Jason’s prescription at the end of this post. The lead-up reminded me of Bob Parson’s quote at the beginning of TWiST, “When you’re ready to quit, you’re closer than you think.” What I got from it was just an inspirational reminder that you’re not alone at this stage. Learning and making progress — whatever that may mean — should be the priority. I am in the middle of struggling to get early testers to actually “adopt” my product. For anyone else that was also frustrated by this post, I would point out that Jason’s other posts and podcasts are usually very concrete and provide a high degree of detail. I’m looking forward to more words of wisdom.

  15. It was a huge relief for me when I sold the first licence of my software within 24 hours of it going on sale. At least I knew there was some demand. Up till then, I really wasn’t sure.

  16. Hi Jason, thanks for bringing me as an example but I’m afraid I don’t belong here this time. The chart shows the cash flow since I incorporated, but I didn’t really launch (nor quit my day job / financial security) until June 19th, at which point sales blew up in my face pretty much right away.

    To your point though, even if the financials have been good from 2008, I still have doubts about the future of our small business, almost every day. I certainly don’t want to take it for granted.

  20. It’s encouraging to know that everyone attempting to do something new and awesome is facing the same feelings of uncertainty. I read an interesting study recently that concluded the single biggest factor in determining future success or failure was persistence. People who persist win – every time… eventually (on another startup if not the first one). 

    Thanks for sharing these encouraging observations Jason!

  21. Thank you Jason, the timing on your post is perfect for us.  Our solution requires a hardware device, so we can’t sell it until we can build it and we can’t build it without capital, so we are raising our seed round – man talk about roller coaster emotions and lots of negatives, whew.  Helps so much to hear that it is always like this until it isn’t.

    And to harken to other things you have said – perhaps you can flesh out a good idea as a solo founder, but I can’t fathom getting through these roller coaster times without a fantastic co-founder so you can support each other.

    • Having done it, I can’t imagine it either.  :-)

      At least it’s nice to have a monthly private meet-up of 4-6 other founders under NDA where you can play therapist and brainstorming with each other.

  23. I feel like I experienced that entire last paragraph while taking a shower two days ago. Thanks for the reminder.

  25. Hi Jason,

    It’s reassuring to see that every company has to go through this rite of passage . I think it’s helpful to look at Metcalfe’s Law if you’re growing a community or online network. It’s brutal up front but with just a few more connections it can start to grow exponentially. 

    Here’s a breakdown comparing this to Facebook’s growth from Comscore. http://ondigitalmarketing.com/textbook/foundations/social-network-analysis-for-predicting-growth/

    Great post for all of us slogging it out in startups. Thanks for pulling this together.

  26. Great post Jason…Personally, I keep coming back to Kipling’s ‘If’ (http://bit.ly/wLPuUO) for inspiration. Especially these lines –
    “IF you can keep your head when all about you 
    Are losing theirs” …….

    “If you can make one heap of all your winnings
    And risk it on one turn of pitch-and-toss,
    And lose, and start again at your beginnings
    And never breathe a word about your loss”

  27. GREAT post! Reminds me of trying to convince small business owners to stick with SEO when, after only a couple weeks (or months), many are ready to throw in the towel (WTF!?!).

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