Startup = Growth
by Paul Graham · read the original
A startup is a company designed to grow fast. Not a new company, not a tech company, not a funded company. PG shows how that one definition explains everything: what to work on, how to measure a week, why VCs exist, and why acquirers overpay.
- 1
A Startup Is Designed to Grow Fast
Startup = a company designed to grow fast. Not new, not tech, not funded: fast-growing. Everything else about startups is downstream of this.
- 2
Barbershop vs Google
Fast growth requires making something a huge market wants AND being able to reach and serve that whole market. A barbershop fails (b); niche software fails (a).
- 3
Growth Rate Is the Measure, Weekly Is the Unit
Track the ratio of this week to last week, not raw user counts. A constant absolute number of new users means your growth rate is falling.
- 4
What Good Looks Like: 5-7% a Week
5-7% weekly growth is good, 10% is exceptional, 1% means you haven't found it yet. At 5% weekly, $1k/month becomes $25M/month in four years.
- 5
Growth as Compass
Commit to a weekly growth target and judge every decision by whether it hits this week's number. Growth converts company-building into an optimization problem.
- 6
Growth as Evolutionary Pressure
Optimizing hard for weekly growth doesn't just execute your idea, it mutates it. Growth pressure can evolve you into a better company than the one you planned.
- 7
Why VCs Exist: The Growth Math
VC funding isn't culture, it's arithmetic. Growth aligns founder and investor payoffs and produces the exits VCs need, and rare huge winners justify the failure rate.
- 8
Why Acquirers Overpay, and What It All Adds Up To
Acquirers pay for the compounding and for insurance against you becoming a threat. Every 'weird' feature of startup land is the growth math expressing itself.