Slow Growth

By editor on February 20, 2018 — 1 min read

This framework is something that we actually borrowed from another very successful company: eBay. And I changed it slightly, but a lot of it is still the same. Again, sometimes when you start a company, the ego is that you have to invent everything.

My ego was actually around winning: I just wanted to win. And so when I heard the people at eBay talk about this framework, I thought to myself, “This is excellent, and we should use it as well.”

This is a framework, if you are building a B2C company, to think about how you can understand, and measure, and create product leverage. And so let’s talk about these in detail.

The first is this idea of acquisition. And so what is acquisition? So if you remember what I said earlier, there are really only ever users in three states. They’ve never heard of you, they’ve tried you, and they use you and they love you. Most people believe that you must do anything to get the fastest growth possible.

I would actually tell you it’s the exact opposite. It is so important, when you’re first building a product, to not get people to use it, but rather to get the people that love it to use it. That second group of people is always much, much smaller than the first group of people. But most people will reward you for focusing on that first group. It is always a mistake. You are better off having 500,000 people, 50,000 people, 5,000 people, 500 people that actually love your product, vs. five million people that were tricked to use it. (50:25)

Posted in: Entrepreneurship

Editor's Note

These are Chamath Palihapitiya's words. They are probably some of the best thoughts on VC, business, and life, but were scattered around the Internet. They live now in this archive.