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The Only Way to Grow Huge

blog.samaltman.com

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Re: The Only Way to Grow Huge

#81

Post by PakG1 »

ekanes wrote: post #69
larrys wrote: post #54

Earlier quoted context omitted.

With all due respect to Sam I have no idea what qualifies Sam to even be opining on this subject without a bit more of a circumspect attitude. If he was a professor of business or had a long standing knowledge of business that would be one thing. The word "most" would certainly be better but even that goes a bit to far with a subject as large as "business" and "companies".

To be blunt, people who've done consistently well in the startup world run circles around "professors of business".

This is probably true at the averages, but at the topside of the scale for both populations, I wonder if it still applies.

Do the Peter Druckers and Clayton M Christensens of the world really not know more than the Steve Jobs and Bill Campbell types? I choose those names rather than Bill Gates or Larry Page because those guys have done multiple companies, which seems to be an important criteria for doing "consistently well". I find it difficult to believe that such prolific thinkers as Drucker or Christensen would get circles run around themselves.

For the bottom of both populations, I'd even venture to guess that the professors of business are more knowledgeable than the startup founders. Come on, you've met some pretty bad startup founders, and you know it. Although I suppose it also depends on how one defines the criteria because it's always easy to cull the population to suit one's conclusions.

Re: The Only Way to Grow Huge

#83

Post by cbsmith »

The real magic is:

customer acquisition cost Now, one way to get there is referrals. But other ways to get there is to have a product good enough that at least you get repeat customers, and still yet another way is to find a way to cheaply acquire new customers through advertising/marketing/distribution channels/etc (i.e., "growth hacker" route). That last one is pretty hard to sustain if your product is "bad" but might work if your product is "ok". The other two require varying degrees of positive customer experiences.

Generally the tried and true way to get the job done is to build a product that reliably gets return customers to maximize customer lifetime value. Then you continually reinvest every dime you've got on sales/marketing to drive out that fast growth to give yourself advantages of scale as quickly as you possibly can.

This tried and true approach works better where you aren't in a market where you are constantly reinventing your product/company (i.e., not the tech business). For tech companies, the referral approach is the easier one to pull off.

So while I wouldn't entirely disagree with the article, I think as a consequence of perhaps being overly focused on tech, it's under appreciating the value of a proper marketing & sales strategy.

Re: The Only Way to Grow Huge

#84

Post by pbreit »

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 think many of your examples are wrong.

Time magazine, Warner Bros, TBS and HBO all benefitted immensely from excellent products and word of mouth.

Regarding Comcast, I know you're hung up on the use of "only" but being a government-issued monopoly probably makes it a less interesting example for this topic. Despite that, we would need to go back in Comcast's history to really understand how it grew.

Oracle and Cisco are terrible examples since they originally produced market-leading products and gained very strong word-of-mouth.

From a cursory reading of Epic history, it also sounds like a bad example for you since it relied heavily on reference customers.

Drugs obviously have huge word-of-mouth spread.

Re: The Only Way to Grow Huge

#85

Post by pbreit »

smoyer wrote: post #32
tlb wrote: post #21

Earlier quoted context omitted.

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 abou…

I'm an almost 25-year veteran of the cable industry and I can tell you that Comcast and Time-Warner didn't grow huge via word-of-mouth. The benefits of cable service grew community systems by word-of-mouth, then Comcast and Time-Warner grew by acquiring and consolidating systems. For example, Time Warner Cable Oceania now provides cable service to the entire Hawai'ian island chain, but they had just bought out the la…

Time Warner is Time magazine, Warner Bros, HBO and TBS. All having massive word of mouth spread.

Re: The Only Way to Grow Huge

#86

Post by pbreit »

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.

Reference customers are absolutely critical in the enterprise.

Re: The Only Way to Grow Huge

#88

Post by adamzerner »

larrys wrote: post #54
pak wrote: post #49

Earlier quoted context omitted.

> In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size they don't have to rely on making something great to grow bigger, but that if you look back at the earliest history of those companies, you'll find most did. (emphasis mine) It's hard to call it a misunde…

With all due respect to Sam I have no idea what qualifies Sam to even be opining on this subject without a bit more of a circumspect attitude. If he was a professor of business or had a long standing knowledge of business that would be one thing. The word "most" would certainly be better but even that goes a bit to far with a subject as large as "business" and "companies".

That is a DH1 argument. Anyone is "qualified" to talk about anything.

Idea: A social news aggregator that scores people on the disagreement hierarchy, and penalizes people who score poorly by not letting them comment and post (or at least gives a lower weight to their comments and posts) (not trying to single you out larrys, just throwing it out there because I think it's a valuable idea)

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