FounderQuest

FounderQuestEpisode 14
If You Aren't Growing, Are You Dying?
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If You Aren't Growing, Are You Dying?
By The Honeybadger Crew • View the Website

The guys talk dissect the "If you're not growing you're dying" aphorism and debate if it has merits or if it should be discarded into the dustbin of history. Do entrepreneurs need to have a winner take all mindset or is it acceptable to be a minor player in a large market? Let's get philosophical on this episode of FounderQuest!

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The guys talk dissect the "If you're not growing you're dying" aphorism and debate if it has merits or if it should be discarded into the dustbin of history. Do entrepreneurs need to have a winner take all mindset or is it acceptable to be a minor player in a large market? Let's get philosophical on this episode of FounderQuest!

Full transcript:

Josh:               00:00          I just... I think that Ben could really pull off like a massive... Like if you had a gigantic, like foot long beard or something. I think you could pull it off.

Ben:                00:11          I could pull off the following.

Starr:              00:12          Like one of those people who moved to California for the gold rush.

Josh:               00:15          Wouldn't he look amazing?

Announcer:          00:17          It's like Steve Jobs and the dude had triplets and they built an app. This is FounderQuest.

Starr:              00:26          If you have one of those cabins and tell people to get away from it.

Josh:               00:29          Like the Unabomber. So I enabled... What is it called? Tweet Delete or something like that? I think you did this too Starr but it deletes all your tweets like beyond a certain timeframe or date.

Starr:              00:48          Yeah.

Josh:               00:49          So now I only have the last year of tweets on my Twitter account.

Starr:              00:55          That's good. So people can't like blackmail you with your own words.

Josh:               00:59          Yeah. They can't like go back to like 2008 and dig up you know, whatever I was saying back then.

Ben:                01:06          I have kind of mixed feelings about that. I mean I like the idea of preserving that history even if it's stupid. I don't know. I guess maybe you could have this goal of tweeting such that your family at your funeral service they just get up and read your tweets your entire life.

Josh:               01:26          I don't know about that. I'm not sure that has... I'm not sure that's how it works.

Ben:                01:32          I mean, they can read the date stamp like March 4th, 2004. Pooping.

Starr:              01:41          My thought on the whole thing is that like what good is it doing anybody to have like my ancient tweets out there? Like the only good is doing anybody is people who are like harvesting that data. And I know people have already harvested it but why leave it out there? Like nobody's going back and reading an old tweet of mine and being like, "Oh, that was insightful."

Josh:               02:01          You mean you... But you don't want to quote tweet yourself from like 10 years ago just to show everyone how right you still are or you were back then or whatever?

Starr:              02:10          Yeah, I don't know. I'm not I don't think that's myself.

Josh:               02:16          Sorry, I totally like blew up your train of thought.

Starr:              02:20          It's okay. There wasn't much of train of thought. It's more like one of those, you know the things like, "Oh brother Where Art Thou?" where they sort of like pump up and down? That's like well platform. They always have them in cartoons?

Josh:               02:32          Yeah.

Starr:              02:33          Yeah. It's like that. That was like the train. That's my train.

Josh:               02:37          Just like the maintenance crew.

Starr:              02:40          Yeah. Oh, so today I think we're going to talk about something that was on Twitter. Justin Jackson, who is at Transistor FM, was in a conversation on Twitter with somebody about this topic of if you're not growing, you're dying. And I think somebody else brought this sort of quote out. Like we all heard this. This is sort of a little aphorism that makes its way around.

Starr:              03:03          And people say... Its one of the things that people say without thinking about too much. And Justin, I think disagreed a little bit with us and was like, "Well, at Transistor, maybe that's not the case." So I think we're going to talk a little bit about that today. And just see where the conversation goes.

Ben:                03:20          I think the danger when it comes to the growth mindset of like, "I have to grow for growth's sake." I think that's where it gets dangerous. And I think that's where a lot of people who reject the whole VC funded path. Because they don't want to have that scenario where they have to grow, like at an extreme rate, or else they just go bust. Like the go big or go home thing. I think-

Starr:              03:44          So you're saying that like there's different pathways, right? There's like this VC funded pathway. And so you're saying like if... The VC funded pathway if you're not like having major growth and you are effectively sort of dying? Is that what you're saying?

Ben:                03:59          Yeah, I think they want you to die if you're not having that spectacular growth so they can focus on something that is having that spectacular growth.

Starr:              04:04          Whereas like a little company like ours like, what does that even mean?

Josh:               04:09          In a regular business?

Ben:                04:10          Yeah. I mean, you may not even be able to handle that spectacular growth. You just are... I don't know if you've read that book Company of One? Fantastic read, if you haven't had a chance to read it.

Starr:              04:20          No. I haven't.

Josh:               04:21          I haven't either.

Ben:                04:22          Yeah. He talks about the same concept. Like he's not interested in running this mega corporation. He wants to run a business that he can just run himself and maybe that involves some contractors from time to time. Maybe that involves a partner here and there. But overall, he wants to run a business that he can just manage himself. And the idea being that like that, to me, in his words, is a comfortable business to run.

Ben:                04:46          I think that's one of the things that we decided early on in the Honeybadger early years when we had investors calling us and asking us about investing, is that we decided we didn't want to have that kind of major growth company. Like we didn't know how to run that kind of company. And we didn't want to learn that with Honeybadger. We knew how to run a small shop and that's what we felt comfortable doing.

Josh:               05:05          But let's talk about you know... So what about like bootstrapper levels of growth? You know, like regular business growth levels. Let's say like not 10-X'ing but whatever. Say 30% year over year.

Josh:               05:21          I don't know about you guys, but like, whenever things are completely flat and stagnant or stagnating, then I do feel... or stagnating, whenever things are totally stagnating, I tend to feel kind of like I'm wanting to kind of pour some more gas on the fire or whatever.

Ben:                05:41          Yeah, I agree. I definitely lose motivation to work on a product when I don't see any increased benefits from what I'm working on. Right. If you don't see the results, why keep putting effort into it. And so if your growth is completely flat, I think you will probably eventually die just because you lack interest in keeping it alive.

Starr:              06:00          I don't know. Is that true? So take like a corner store, like a laundromat. They're not growing 30% year over year. For any business that's not a software business, growing 30% year over year is insanely good. So I guess they don't even have laundromats even more. I'm showing my age. Like that's not... they're not growing 30% year over year, but it's a good steady business.

Starr:              06:22          So I mean is that... So this... Let me just take a step back. So I really freaking hate sort of sayings like this. You're not growing, you're dying. It's one of the things that it sort of has this pleasing symmetry to it, like it sounds cool and good to say and so it shuts your brain off. And you don't understand just how freaking stupid it really is. Maybe for like a very specific type of company. Maybe for like a VC-backed company. Maybe that's true. If you're not growing eventually you're going to... you're not making enough money, you're going to run out of runway, you're going to have to fire everybody and your business is going to be dead because you're spending more money that you're making.

Starr:              07:01          But for a normal business that is not VC funded, like what does that mean? So the sort of mom and pop sandwich shop on the corner who's not growing, like are they dying? Well, they've been there 20 years.

Josh:               07:13          So maybe it maybe it should be more like, if you're not growing you, you might be bored, but you might also be fine.

Ben:                07:20          Yeah. Well, that's what I wanted to say. Is I think that it's definitely aligns with a certain personality. Like we build software because we're interested in solving problems. Like, I would be bored out of my gourd if I was running a sandwich shop for 20 years. Like making the same sandwiches every day for 20 years that would drive me absolutely crazy. But I'm not-

Josh:               07:39          I'd like to see the sandwiches that you would come up with as a result of that. Thanks though, Ben.

Ben:                07:45          But that's not to say that that's not a perfectly reasonable business for someone to have. If that's what they enjoy, great. And I agree with you Starr that they're not going to have a goal of growing that business 30% year over year, they're going to have a goal of maintaining that business and having a good lifestyle to go along with that business. But like, I would be bored to tears if I was doing that. And I think in the software world and the software companies like growing is a sign that you're solving people's problems in a way that's interesting. And you're working on interesting things. I don't know. Maybe I'm wrong.

Starr:              08:14          Okay, so what do you mean by growing? There's lots of different types of growing, right? We can grow profit, we can grow revenue, we can grow customer base, and they're not necessarily related.

Josh:               08:24          We can grow vacation time.

Starr:              08:26          We can grow vacation.

Ben:                08:27          Well, and personal development too. I mean, you can grow your experiences and the knowledge you have of whatever technologies you find interesting, that sort of stuff.

Starr:              08:35          Yeah. So I guess I'll come around. I'll say that, well, maybe this makes sense. Maybe this aphorism makes sense. If you can define growing and dying in whatever ways you want. If you can make those mean anything, then yeah, sure.

Josh:               08:51          Like I get all my gains at the gym. So I don't... the business can just kind of stay flat and it's good.

Starr:              08:57          There you go. I'm sorry. I'm just trying to bump up the controversy for the follows and the listens and the subscribes, right?

Josh:               09:02          I think you're... I honestly think you're onto something there though. Like it's those like drastic statements that kind of like just are designed to get people's blood pumping versus actually like say something or get to the bottom of an issue because, like things are rarely black and white. There's a lot of different ways to look at it.

Josh:               09:22          So one of the other points made in that thread was Jordan was talking about goalposts which kind of resonated with me. He was saying that basically like, with best intentions, you can say like, "This is going to be enough if I get to X dollars and MRR." And then you get there and I think this has happened to us, at least it's happened to me where you get there and then it's like this is awesome. Like, we hit this goal. It's been what we've been like working for the last few years or whatever. And then it's like, "So now what?" And then my brain comes up with a new arbitrary number. Basically, that's how it works. And that's the new goalpost. And then that becomes enough.

Starr:              10:08          You know what that's called Josh? There's a name for this in psychology. It's called the hedonic treadmill.

Josh:               10:13          Nice. Okay. Today I learned.

Starr:              10:15          Yeah. So it's the whole thing. It's like, yeah you're making 20 grand now and you're happy. It's like, "Well, now I need to make 30 grand," because you get used to... you get used to whatever you have, no matter how good it is. Always want more. So basically, this insight is a bit at the basis of a lot of sort of stoic thinking, which is the hot philosophy right now among startup influencers, which I consider myself to be.

Starr:              10:46          Yeah. So the idea is that while you just have to... You can note like, the problem with the hedonic treadmill is you're never happy, right? So they would say that our problem is that well, we're saying that to be happy we have to grow. But that is just shooting ourselves in the foot. Because we can't control whether or not we grow necessarily. We can only control our perceptions of things, we can only control our reactions to things.

Ben:                11:15          Yeah, I definitely believe in that the whole treadmill concept. You get that new shiny car and then six months later, it's not a new shiny car anymore. It's like it's just a car. But at the same time, like I'm very goal oriented, and if I'm not striving towards a goal, then I feel like I'm wasting my time, like I'm not making myself better in whatever dimension you want to measure that. It's not necessarily strictly tied to money coming in the door necessarily, but could be interpersonal relationships, it could be physical health or whatever. Like I have plenty of goals that I want to accomplish.

Starr:              11:49          Oh yeah, I was just going to say that, you can set like... It is possible like you mentioned to set very personal goals that are not based on sort of external factors.

Josh:               12:01          Yeah, for me, like I think I like to see revenue growing and profit growing obviously. But it doesn't all have to come from that to have like personal fulfillment. Like I like to have everything like in my life growing on some level. So like Ben mentioned fitness, you know that's like I like to go to the gym, like I like to be seeing progress there. Like I can see progress in a lot of different places that kind of give me that... that satisfy that like bored factor that kicks in, like if one thing isn't growing like hopefully you have some other things that are... you're making progress on.

Josh:               12:37          And for me, I think that kind of back kind of satisfies a little bit of that, what you said the treadmill basically where if one thing is never enough, then you're just going to constantly be chasing that one thing. But yeah. But you can have like multiple things that you know if one thing's not growing as fast as you like you can go and work on something else. Well, you know, in the meantime.

Ben:                13:01          But I've had that same experience that you had Josh. You talked about, you reach that dollar goal, whatever that is, and then you're like, "Okay, now I have a new goal." And I think that can be healthy. Because you're pushing yourself to a new level, to a new challenge. And as long as you don't tie your self-worth in how much money I'm making, I think that's fine.

Josh:               13:23          And what are you prepared to do to get there? Anything? And how soon do you want to get there? Like, are you just like stab people in the back and just work 16-hour days.

Starr:              13:37          Those are definitely equivalent.

Ben:                13:39          Yeah. And we've had we've had those kind of conversations when we've talked about like, what do we want our revenue goals to be? But we've always couched them in the terms of, but we're not willing to sacrifice our day to day happiness or the time that we get to spend with our family or the other things in our lives that make us happy.

Starr:              13:56          You know, I think one aspect of this whole idea that, if you're not growing, you're dying. That would be interesting to talk about. And I know this may go wildly off track. So we're doing this-

Josh:               14:09          This is FounderQuest so-

Ben:                14:10          Yeah.

Josh:               14:12          It's kind of our MO.

Starr:              14:13          I think this whole, you're not growing you're dying thing. I think a lot of it is tied up with dominance. And I think this ties into a lot of the reason why people... People say Ruby's dying all the time, even though it's still there. But what people mean, I think what people are really saying is that if you're not growing, you're not keeping with everybody... up with everything else may be growing. And so you're not going to be dominant. It's this whole idea of a winner take all sort of ecosystem which may be in some aspects like search, Google has won the search war for now, pretty much. Although I use DuckDuckGo because I am a decent human being.

Josh:               14:52          Same.

Ben:                14:53          Same.

Josh:               14:53          There you go. High-five.

Starr:              14:55          So people say, well Ruby's dying because well, that's not really true. Like lots of people are still using Ruby but it's no longer maybe keeping pace with like Python. So it's no longer this dominant thing. Because I remember when like Ruby was hot, everybody's like Ruby has taken over the world. Like, everybody's got to learn Ruby. And that's just sort of gone away. But it's still, like the language itself is still here. Maybe the key to the sort of happiness, and everything is to sort of give up this idea that you have to win, you have to be number one, you have to dominate.

Josh:               15:29          DuckDuckGo might actually be a pretty good example of this. Because even like, in the basically monopoly market of search, there's still room for this little like at the time scrappy search engine to come in and get a number of people enough people to make a business out of it. And grow in that environment. There's like two search... three search engines that people use. And DuckDuckGo was able to get into the market and actually like become one of them.

Starr:              15:58          You know what's sad, I was like, what's the third one. It's like... It's Bing, right?

Josh:               16:01          I'm pretty sure it's Bing. Maybe we should Google it. Sorry, Microsoft. Actually not sorry Microsoft. They're getting ready to eat the world again.

Starr:              16:17          You know, you make an interesting point about DuckDuckGo because, I think there's always room for sort of small niche players in a gigantic market like you can always find people who don't want to go with the giant.

Ben:                16:29          Well, I was just thinking about the second half of the tweet. We focused very much on that that you're not growing you're dying part. But there was more to squeeze. He also said-

Starr:              16:40          Oh, there was? I didn't actually read the whole thing.

Ben:                16:43          He also said adding more people and maintaining the same net through growth, not at all attractive.

Starr:              16:49          Can we take a second and maybe explain what he means by that because I feel like may be a little bit obscure.

Josh:               16:54          I kind of stumbled over the wording of that myself and I was trying to read it and failed. Maybe we can dissect it a little bit.

Ben:                17:02          If you're adding the headcount, and you're not really moving the needle on the top line, what's the point?

Starr:              17:09          So if I hire somebody, and they cost me $100000, and as a result of their work, I make an extra $100000, I'm still making the same amount of profit. I just got an extra employee.

Ben:                17:19          And that goes back to the company of one thing.

Josh:               17:23          I mean, it's nice to have friends.

Josh:               17:25          But not if you have to pay for them.

Josh:               17:30          Well, I mean, if they're if they pay for themselves, then the more the merrier.

Ben:                17:36          No, I was just thinking of this. What you were saying about the winner take all mentality and that's definitely a software thing. I think that's we face that when take the question of do we take investment money because our competitors have and are they going to take the whole market, if we don't do the same thing they're doing? And your point about people choosing different providers for whatever reason. Like all three of us have chosen DuckDuckGo probably because of the privacy implications of always using Google for everything. And that's one way that DuckDuckGo has carved out a segment of the market for themselves.

Ben:                18:15          In Honeybadger's case we've carved out a segment of the market or for ourselves, based on features, brand, whatever. Whatever reason people have to go with Honeybadger over one of our competitors. And we're still around and they're still around. It hasn't been a winner take all. It may be a winner take most. We don't even... We don't know because we don't know our competitor's revenues. But there's definitely room for multiple people in the space.

Ben:                18:45          And I think that over the past few years, that's become more of an acceptable idea in the software world where it may have been previously like, "Well, you've got to be the number one or else you don't matter at all." And I think we've seen a slight change in that attitude over time.

Josh:               19:05          Do you think there's a risk of like... So there's always going to be like some room for the smaller players. Because there's always going to be enough of the fringe of people usually that they like things that in such a certain way that they'll go and look for alternatives. But that said, there's also a lot of spaces have the one or two big players that do tend to dominate most of the market. And then the smaller players tend to live on the edges or have a smaller, a relatively small percentage of that market.

Josh:               19:42          Do you think that that's a risk to the smaller players as over time as those markets get more consumed, or as the larger players tend to consolidate and centralize things generally tend to centralize? Do you think that's a problem?

Ben:                20:00          I don't think so. If you have a reason to exist, if you have something that's interesting enough for you to have customers, I don't see a big fear. I mean, I don't expect our customers to like one day decide, "Oh, you know what? I'm just going to switch." No. I mean, we're providing great service and they like that service. You know, look at how many car companies there are. Yes, there's been a lot of consolidation over the past say hundred years. But there's still a lot of car brands and there is still demand for that Aston Martin. There's still demand for that Bentley. You know, all these different brands have their unique reasons to exist and people still buy them even if maybe Bentley doesn't sell as many cars as Ford. I don't see them crying in their milk.

Josh:               20:52          The takeaway here is that Honeybadger is the Bentley of error tracking services.

Ben:                20:59          Of course.

Starr:              20:59          No. I think we're the Aston Martin because if James Bond needed to track some errors, he would definitely use Honeybadger.

Josh:               21:02          Oh, yeah. For sure.

Ben:                21:03          Of course I had to go and look it up. And I had to find out who Bentley is actually owned by because obviously, they're not a standalone company anymore. They're owned by Volkswagen.

Starr:              21:13          So I think like when people say, if you're not growing, you're dying, like part of that is... maybe that's part of just sort of like a personal statement of where they want to be in life. They're saying, like, "Well, I want to be at the head of a company that is dominating the market that has won the winner take all race. And if I can't do that, then I don't want to play. I'm going to take my cards home and go."

Starr:              21:37          I think this maybe segues a little bit into the second part of the tweet that we talked about earlier, because the whole idea of well, if you hire people, and it doesn't increase your profit, necessarily, then that's not desirable. But I think that that could be desirable in the case of where you want to kind of step away from the business and provide a little bit more space for yourself. Because there's a difference between owning a company and running a company. You could very easily...

Starr:              22:10          Like if you say start a company, and it becomes Google, and you want to be at the head of it, well that's part of its own sort of power trip. But if you start a smaller company, and it's going steady, and you're getting a little bit bored with it, well you have the option to replace yourself. And by replacing yourself maybe your profit stays the same, maybe it goes down a little bit because you're just replacing somebody who's doing the same thing. I don't know where I'm going with this.

Josh:               22:40          You mean like replacing yourself basically just turning the business into like an asset that you that you just have someone run?

Starr:              22:48          Yeah, exactly. It's like, you know you can bring a business up to the point where it's stable, and it can maintain itself for a while and then you can just step away from that.

Josh:               22:59          I've told you guys before the way I kind of look at Honeybadger and my other business or I guess businesses is kind of like as an investor I try to look at it like an investor like these are investments. And you know I've put most of what I've invested in these businesses over the last whatever 10-plus years is time. And so we're building these things up but basically like this could have just been just as easily been like money in a mutual fund or something that grows over time and that would be like more of a passive investment.

Josh:               23:38          But there's no... I don't really see a difference with a business. Like a business is still a way to grow your money, basically, over the span of your lifetime. And so like, I totally think that it's fine if you want to do like if you can get the business to a point where it's generating a predictable amount of profit and you can hire people and just have it just run by itself then that's just basically an investment asset that you have there that's generating a return on a regular basis. Just like anything else.

Ben:                24:11          Yeah, one thought I have about the growing on that note of treating it like an investment and being satisfied with where you are. If you're satisfied with, what are my living expenses today? Great. But what are you going to do for 10 years from now or 15 years from now? If you are satisfied with something that gives you a savings rate of let's say, 75%, well then you know, "In a few years, I can retire and I'm done." So I think... I guess what I'm trying to say is you have to be careful about being short-sighted about what is enough, right? There's the treadmill of nothing is ever enough. And then there is the, "Well, I'm fine where I am today, but I'm not really thinking about the future," which is probably not enough. So I guess the line you need a walk is, "I'm going to make sure that I have enough and not be so concerned that my enough always changes and I never have," and I'm not saying that too well.

Josh:               25:11          Well, I try to look at things with like I'm a big like long term financial planner and you know all that stuff and I know you guys are too. So like that's how I try to look at everything. And I'm trying to look at it like I've got this vision of like where I'd like to be in the future and it's not on a yacht. I wouldn't mind living on or having a yacht or something that I vacation on or something but I'm going to be totally fine if I don't.

Josh:               25:41          But I have this future that I see for myself and my family. And so I look at what I'm doing now and my businesses and our growth and all that stuff in terms of is this getting me there? Not, "Is this like getting me to Zuckerberg or something?" And so that kind of helps temper the desire to go and start some sort of like 10X company and be a rock star or something like. How many people like do that and actually succeed anyway, versus how many people actually just slowly work over the course of their lives to achieve like their, whatever retirement dreams and actually achieve that. Like, that seems like a much more achievable goal versus like, constantly trying to create some sort of like unicorn.

Ben:                26:36          Yeah. I'm totally on board with that. I don't want the yacht but I do want the private jet.

Josh:               26:41          Yeah. I'll take a private jet. I mean, I'll take the mansion. It's just like... I don't know. It's like-

Starr:              26:45          Yeah, no mansion for me. You know, I'd be happy if I could just get to finish the shed I'm building on my backyard. That's all I want. You know, I think the important thing though is you know, these are all very personal things. These are all very personal decisions and goals and all that. And one thing that really irks me about that phrase and I wish we could all sort of get beyond, that the sort of VC mentality of winner takes all you have to be playing your A game all the time, you got you're growing you're dying, et cetera. These are like, moral statements. I'm saying like, "Well, this is true for everybody when I say stuff like that." And I wish we could all just be like, well for me, I want to be the head of a really big company doing awesome things. You know, we don't have to couch that in terms of this universal like, this is the right thing for people to do as human beings.

Josh:               27:38          Everyone has different goals. Yeah. I think for me, if put it in financial terms, like, I don't want to be rich, but I want to be wealthy. And like, the way that was explained to me, I think a book or something back in the day was like, rich is like you have a lot of money or cash or something. But wealthy is like, you have the ability to sustain yourself and it's like it's financial... more financial independence or you know being independent.

Josh:               28:07          And so I don't care... Like I said, I don't care. I don't need the yacht or the mansion or something but I do want the independence and the freedom that comes with having enough to basically sustain a certain lifestyle that is the level that I'm happy at. And if I can do that and I have to work or not have to worry about my family and our future, then that's kind of my personal goal.

Starr:              28:31          Well, Amen. I think that's a great place to wrap up. Was great talking you guys and we'll look at you on the flip side.

Starr:              28:42          Sounds good baby.

Starr:              28:45          I've decided that that really awkward end things are like my stick now.

Josh:               28:50          No. Awkward is good. I think it works for us.

Starr:              28:57          It's my natural talent.

Announcer:          29:00          FounderQuest is a weekly podcast by the founders of Honeybadger, zero instrumentation, 360 degree coverage of errors, outages and service degradations for your web apps. If you have a web app, you need it. Available at Honeybadger.io. Want more from the founders? Go to founderquestpodcast.com. That's one word. You can access our huge back catalog, or sign up for our newsletter to get exclusive VIP content. FounderQuest is available on iTunes, Spotify and other purveyors of fine podcasts. We'll see you next week.

What is FounderQuest?

Three developers building a software business on our own terms.