(2021-01-31) Paruchuri Startup Ambition

Vikas Paruchuri questions startup = ambition. It’s an axiom that startups are defined by growth. If it’s not growing 10% a month, then your company is seen as something less - a “lifestyle business”.

The association of startups and growth is an incredibly useful one for the investor class. They buy call options on a bunch of talented people

Only a lucky few survive long enough to reach scale and return 100x+ to their original investors

they’ve made their founders incredibly wealthy.

But they’ve done this by creating a system of regressive taxation. Yes, Uber is an incredibly useful service for helping people get around. But it’s also a way to skim 40% of the wages of their drivers - some of the lowest paid people in their countries

I hope I’ve painted a picture of how the mantra of startup=growth can lead to horrible externalities. So what should startups be about?

What gets a startup from this point to growth in the first place? It’s ambition. Ambition to solve a pain point for a customer. In Uber’s case, it was helping wealthy people get rides more efficiently. For Facebook, it was connecting kids on college campuses.

To grow, a small company needs to serve its core customer (ICP) incredibly well. So ambition comes before growth

Serving a small audience with depth isn’t inherently less ambitious than serving a larger audience more shallowly. It requires just as much product innovation, and is more impactful to the audience.

Framing startups in terms of growth means that companies eventually subjugate their impulse to serve their customer better to their impulse to serve their shareholders better.