What if there isn’t another 10x?

cartoon6232What if Dropbox is just an awesome file-sharing and backup service but not a universal key/value storage API?

What if OpenTable is the perfect reservation system but nothing else?

What if Yelp has ratings but can’t solve the logistics of food delivery?

What if Facebook can make $20b/yr in advertising, but since the teens and social media elite have left, it will never make $200b/yr?

What if Twitter will never 10x its user-base but remains a critical world-wide communication, sharing, and news system for the next decade?

In the tech industry we’re constantly repudiated that growth is the prime value of business. If your growth dips below the level of “rivets rattling themselves out of the plane,” revenue multiples plummet, and you’re written off by the press as a has-been ripe for disruption by startups 1/1000th your size but “growing exponentially.”

Nevermind that Microsoft created more cash profit in 2015 than Facebook made in revenue. It’s only worth 12% more (in Enterprise Value), because maybe Facebook can keep tossing ads at people or invent their own virtual currency, or monetize chat users.

“How do we 10x” is a great question when a startup is young. Does it always remain the right question?

At some point it cannot be the right question. No company 10x’s forever. Not even Google. They know this, which is why they’re now a Berkshire Hathaway-style conglomerate of individual companies which themselves could potentially 10x.

You can’t know right now whether you’re done 10x’ing, but if indeed that’s not a plausible result, how could you be redirecting your attention to other important things, like creating more jobs and better working conditions, to be a catalyst for employee’s personal growth, to give back to relevant communities, to use your logistics and technology and infrastructure and cost-savings to do something important with this success you’ve earned?

At some point, “just ploughing back into a 10x growth objective” is not the optimal strategy for making your so-called “dent in the universe.”

In fact, it is at that moment, when a company is applied to betterment instead of (only) biggerment, that the nature of a company’s true dent in the universe is determined.

What will yours be?

  • Jeffrey Fry

    ..yes, just being bigger is not always the same thing as being better or the best at something. Well said sir.

  • http://neversettle.it/ Kenn

    with people spending on average over half their awake time on this planet in their office – the workplace is one of the most influential places in our societies and thus ripe for incredible opportunity for companies to impact the universe through individual lives

  • http://videoempresas.com/ Luis Garcia

    The 10x is not just a strategy. Its part of a hole vision of the World based on perpetual growth, illusion, debt, etc.

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  • Bruce Hansen

    Companies will naturally change the benefits to their employees as their period of hyper-growth comes to an end. They will likely offer more comfort and stability in the absence of obvious growth opportunities. This will obviously attract a different type of employee as well.

    As growth slows and profits roll in (xf. Microsoft), the best thing the established company can do with the money it’s generating is to distribute it to their shareholders. Said shareholders, being people, can then make moral judgments on how to make the world a better place with the money. Or possibly start a new, dynamic company and start the cycle over again.