Is ‘growth-at-any-cost’ worth the price?

“My dad taught me that when you borrow money, it’s the worst day of your life.”                      

– Gary Vaynerchuk 

Go Big or Go Home!

Starting a new company? And feel like growing it, big time, like there’s no tomorrow?

If not, you should!

Or at least that’s what the conventional wisdom suggests.

Why?

Hint – it has to do with money (more on that later)…

The next Uber of Whatever

But since we’re talking about money, let’s bring in the conversation the dream of pretty much any young aspiring entrepreneur these days.

Which is of course, creating the next “Uber for [insert service here],” making it big and then going and live the good life!

I know, I might exaggerate a bit, but don’t tell me I am the only one thinking that the “unicorn fun club” is going from strength to strength.

So, assuming you are still with me don’t you think it’s about time to explore a) whether the growth-at-any-cost is worth the price and b) at what point becomes a reckless strategy?

Glad to hear that!

Let’s jump straight in…

The case for going BIG

Before getting into today’s question(s), I think it’s worth opening a small parenthesis and briefly see what’s feeding the ‘go big’ trend.

The answer?

Here you go:

Factor #1: The grow or die inevitability

This of course refers to the long-held belief that growth and (business) survival go hand in hand.

And, in short, the rationale behind this argument is that since, in a competitive marketplace, there will always be other players on the lookout to eat our lunch (aka market share), by not aggressively growing our business and diversifying our portfolio, we make ourselves vulnerable to their attacks.

Factor #2: The bigger, the better logic

You saw that coming, right?

I know.

Aside from the pile of cash that comes from joining the big league, there seems to be another big driver.

Which is that?

Introducing the impact entrepreneurs:

According to Adam Levene, the person that coined this term, “impact entrepreneurs are driven by a desire to disrupt the status quo. Doing their bit to push the world forward is what gets them out the bed in the morning…{And they} do what they do for legacy, not for places on rich lists.”

Having this sort of definition in mind, it shouldn’t come as a surprise that a key ingredient of their ‘formula’ is to bring their product/service to as many people as possible.

Hence, understandably, going big seems like a one-way street.

So, with all that said, is it time to admit that go big or go home is the way to move forward?

Wait for it…

NO!

Why?

It dramatically reduces the possibilities ever making it (yep, hitting it out of the park rarely happens)

It can neutralise the reason(s) why you decided to start a business in the first place (autonomy, control, and being your own boss)

It can end-up making you live to serve the company and not the other way around (having a business that serves your life)  

And most importantly…

Big does not equal great

What; big does not equal great?

I know, shocker.

After all, that statement is the antithesis of today’s startup culture of glorifying anything big (IPOs, press stories, staff numbers, acquisitions, or lottery ticket winners, just to name a few).

But the thing is, size alone not only doesn’t say the whole story, but actually can be a very misleading indicator of a company’s success.

Why?

Jason Fried and David Heinemeier Hansson in their classic book, Rework, couldn’t have put it better:

What’s wrong with finding the right size and staying there? Do we look at Harvard or Oxford and say, ‘If they’d only expand and branch out and hire thousands more professors and go global and open other campuses all over the world … then they’d be great schools.’ Of course not. That’s not how we measure the value of these institutions. So why is it the way we measure businesses?  

That’s right – small size and greatness are not mutually exclusive.

And just to be clear I am not anti-growth. I am just against one thinking that the only way to build a great business is by getting big.

Small is beautiful

Yes, my friends there is an alternative – staying small and beautiful!

Exactly, the notion that staying small somehow makes you unambitious, lazy, and comfortably mediocre is simply idiotic.

In reality, there are many good reasons why entrepreneurs decide to ditch the go big or go home hype-driven narrative and stay small.

Here are 5 to get you started:

– Retain full control of the business

– Have a healthy and pleasant work-life balance

– Level up the chances building a viable business and make a comfortable living

– Sustain a flexible and not overly complicated business structure

– Keep doing what they do best and enjoy most instead of becoming “the manager”

Moral of the story?

Stop chasing others’ definition of success, set up your own benchmarks, and build a business just big enough to keep YOU happy.

Key Takeaways

– Big doesn’t equal great

– Companies don’t grow or die but rather improve or die

– Going big comes at a hefty cost

– Staying small doesn’t make you unambitious

– Success should be defined on your own terms

***

Ok guys, that’s all from me for today.

If you enjoyed today’s post, check out my kindle book, The Aspiring Entrepreneur Entry Strategy: A practical step-by-step guide for finding a validated, winning business idea that stays true to who you are, that is currently available at Amazon.

I hope to see you soon.

Best,

Andreas

“Small is not just a stepping-stone. Small is a great destination in itself.”

– Jason Fried

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