A thoughtful response to fast growth: It’s all about the network effects

I read this post a few weeks ago by Joel Spolsky about growth and the need for speed (The post is entitled “Does Slow Growth Equal Slow Death?”. I thought to myself for a while and nodded… and all of the examples were spot on: Word vs WordPerfect / Oracle vs Ingres.

But there was something unsettling about his article – particularly the point about becoming a “sales-force” driven company. Immediately my startup-terrible-idea-radar went up.

Then I stumbled on this more accurate post by David@37sigs that is sort of a retort to the Joel Spolsky article.

Upon deeper reflection, I agree with David.

  • Fear is insidious and causes us to do weird things. I know, because I’ve made silly mistakes in the past because of fear and the perceived need for speed. Speed is good, and necessary, but making poor decisions due to obsession with speed is painful and sometimes irrevocable.
  • Make sure that there are significant network effects involved if there’s a business that you’re trying to capture the market share of.

David brings up the sales-force driven company up again in his post and puts it in a little more colored language:

Become a sales force-driven company: Hire a bunch of sales people and make them convince people to buy our software. This is even more enterprisey thinking. Side step the actual users, the developers, and go straight to management with steak and strippers. I’ve worked at sales force-driven software companies and they suck. The sales people will invariably promise more than you have and drive you even deeper into “build everything for everyone”.

He’s right.

The only problem is: On first blush, we’re almost certainly in a business that probably has network-effects. So I should probably hurry up and get back to work instead of sitting here and blogging about this. ;)

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