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The Only Way to Grow Huge

blog.samaltman.com

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Re: The Only Way to Grow Huge

#21

Post by tlb »

pak wrote: post #4

> All companies that grow really big do so in only one way: people recommend the product or service to other people. This is a bad opening premise. Time Warner and Comcast are huge and they don't seem like word of mouth companies to me. Boeing is pretty huge and they don't sell anything directly to ordinary consumers. I would never run around marketing Pfizer products to my friends. Take a scan down the Fortune 500 a…

Cable absolutely became huge as a result of word of mouth. It's been a mature business for 25 years so you may not be old enough to remember, but when it started people were pretty excited about 50 clear channels instead of 2 staticky ones. They told their friends and invited them over to watch shows they otherwise couldn't get.

Boeing became huge in the 1920s and 30s. I imagine pilots talked to each other a lot about what planes they liked flying, and they could not have succeeded if those conversations didn't favor them.

Re: The Only Way to Grow Huge

#22

Post by mikkelewis »

pak wrote: post #4

> All companies that grow really big do so in only one way: people recommend the product or service to other people. This is a bad opening premise. Time Warner and Comcast are huge and they don't seem like word of mouth companies to me. Boeing is pretty huge and they don't sell anything directly to ordinary consumers. I would never run around marketing Pfizer products to my friends. Take a scan down the Fortune 500 a…

I'm curious if there was actually (implicit) word of mouth between businesses. I don't think of Cisco being good because of their marketing, I think of Cisco because I see their successes within other companies.

Re: The Only Way to Grow Huge

#23

Post by gk1 »

dmazin wrote: post #16
lwf wrote: post #12

Earlier quoted context omitted.

He explicitly excludes monopolies, like TW and Comcast.

This comment needs to be stressed. Altman's article simply doesn't make it clear enough that he's excluding companies such as Time Warner. Military contractors are a whole other issue, of course.

A more realistic title, "Here's One of Many Ways a Some Companies can Grow, or Not", probably wouldn't have made the front page.

This is a few paragraphs mentioning a fairly obvious point about growing companies, but trying too hard to seem groundbreaking.

Re: The Only Way to Grow Huge

#24

Post by sjtgraham »

not_that_noob wrote: post #14
pak wrote: post #4

> All companies that grow really big do so in only one way: people recommend the product or service to other people. This is a bad opening premise. Time Warner and Comcast are huge and they don't seem like word of mouth companies to me. Boeing is pretty huge and they don't sell anything directly to ordinary consumers. I would never run around marketing Pfizer products to my friends. Take a scan down the Fortune 500 a…

On the contrary, it is absolutely correct. You forget these huge companies were once small upstarts. As upstarts, their growth was propelled by buyers recommending the product to other buyers. (You can substitute users for buyers here if it is an app). So his point is valid. If you go back to the early days of Oracle for example, they were providing a highly flexible database and would do it on (mostly) any computer…

Is that how enterprise sales work? I don't have any experience there but given how highly paid sales sharks seem to be inextricably linked to ES as opposed to social sharing buttons, I'd say no.

There is always more than one way to skin a cat.

Re: The Only Way to Grow Huge

#26

Post by sjtgraham »

Looking at the comments here, most of them would be nullified if the article wasn't "the only way to grow huge", but instead "one way to grow huge". So far it's looking like this item will soon incur the controversy penalty. I enjoyed the post; simply making something good is the growth strategy that is most applicable to a random kid reading this, but it's not the only way.

Re: The Only Way to Grow Huge

#27

Post by pg »

sjtgraham wrote: post #24
not_that_noob wrote: post #14

Earlier quoted context omitted.

On the contrary, it is absolutely correct. You forget these huge companies were once small upstarts. As upstarts, their growth was propelled by buyers recommending the product to other buyers. (You can substitute users for buyers here if it is an app). So his point is valid. If you go back to the early days of Oracle for example, they were providing a highly flexible database and would do it on (mostly) any computer…

Is that how enterprise sales work? I don't have any experience there but given how highly paid sales sharks seem to be inextricably linked to ES as opposed to social sharing buttons, I'd say no. There is always more than one way to skin a cat.

Actually in the enterprise market Sam's point is even more true. The greater power of incumbents means that you can't get customers unless your product is better by a large margin.

Re: The Only Way to Grow Huge

#28

Post by nostrademons »

sjtgraham wrote: post #24
not_that_noob wrote: post #14

Earlier quoted context omitted.

On the contrary, it is absolutely correct. You forget these huge companies were once small upstarts. As upstarts, their growth was propelled by buyers recommending the product to other buyers. (You can substitute users for buyers here if it is an app). So his point is valid. If you go back to the early days of Oracle for example, they were providing a highly flexible database and would do it on (mostly) any computer…

Is that how enterprise sales work? I don't have any experience there but given how highly paid sales sharks seem to be inextricably linked to ES as opposed to social sharing buttons, I'd say no. There is always more than one way to skin a cat.

It is much, much easier to sell something that the buyer has already heard about from industry peers and generally sees the value of than to cold-call prospects and push products on them that they're indifferent to.

Companies can limp along for a few years with the latter strategy (I worked at one once), but they don't grow, and eventually they get sick of selling stuff that nobody wants to buy and close up shop. For the examples given (Cisco, Oracle), everybody who's in a purchasing position in the industries they serve has heard of them, and they go into a sales cycle "warm". The salesperson's job is to iron out the details and explain how to integrate the product into a customer's existing workflows to make them more efficient.

Re: The Only Way to Grow Huge

#29

Post by manishsharan »

This is grossly simplistic view of the world. Enterprise sales does not work this way at all. And no financial company/banker will recommend your super-duper product to anyone; in fact, some purchasing officers will ask you to NOT sell your product to their competition before they consider buying from you. In industrial supplies business, some factories require you to not sell their product to anyone one else in their target market region.

Re: The Only Way to Grow Huge

#30

Post by nostrademons »

jmduke wrote: post #10

This is a great article, but really only applies to a small subset of companies for whom organic growth is the only way to grow huge. An abbreviated list of counterarguments: Epic, CenturyLink, NBC, Waste Management, Honda, Vanguard.

Honda and Vanguard absolutely grew through word of mouth, and NBC probably did too but it was before I was born. I compare notes with friends when buying a car, and people are not shy about recommending Honda or Toyota. Very few of them recommend GM or Ford.

I also heard about Vanguard through word-of-mouth, where everybody gave the general advice that indexing funds are much more sane than other investing systems, and Vanguard was the leader in that space.

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