Ash Maurya's Blog, page 7

How to 10X Your Business

Breakout businesses don’t grow linearly

but as a step function.

For that you have to think in 10X steps,

not just 2X.

2X is not easy but often doable simply

by adding more resources.

For instance, a service business of 1

can try to approach 2X by hiring 1-2 more people.

But 10X requires non-linear thinking.

It requires innovation which is often hard to come by.

That said, consider this:

You can achieve close to 10X

by 2X’ing three times.

So rather than completely reinventing the business,

Can you instead find three 2X opportunities

that you can apply in rapid succession?

Give Your Brain Time to Think

Some things take time to click.

You can interview half a dozen people

and not notice an “obvious” key insight until a week later.

You can continuously bang your head against a hard problem

only to come back after a short walk and see the solution waiting.

Your brain needs time to steep on problems on its own.

It needs time to pattern match

by relaxing its muscles

not tensing.

You can’t force this to happen.

You can only create spaces for when it might happen.

Take breaks during the day.

Just to sit in an armchair or take a long walk to think.

Take breaks during the week.

Find time to tend to things other than work like play and exercise.

Take breaks during the month.

Find a few days when you leave it all behind.

Your brain and productivity will thank you for it.

A Falling Tide Lifts All Fingers

A rising tide lifts all ships.

When a company has a good quarter,

Every department can point to their internal KPIs,

And take credit for the results.

But a falling tide lifts all fingers.

When a company has a bad quarter,

It’s all too easy to use the same internal KPIs,

To justify why it’s someone else’s fault.

Revenue cannot reliably be used as a measure of progress.

It is an after-effect.

Not cause and effect.

Focus should instead be placed on tracking

leading indicators of the effect.

Modern Portfolio Theory Applied to Innovation

There are 2 kinds of innovation:

sustaining and disruptive.

Sustaining aims for 2X,

Disruptive aims for 10X.

Sustaining is short-term focused.

Disruptive is long-term focused.

Companies need to invest in both.

They need to play both the short and long game.

Many companies get this and already apply a portfolio model to innovation.

But you typically find them mostly invested in sustaining when times are good,

And only increasing allocation towards disruptive during a crisis.

This is a reactive strategy which

often leads to sub-optimal results

because it’s a market-timing strategy.

The best time to invest in risk

isn’t during a crisis,

but when times are good.

Much like:

The best time to be tilted towards stocks versus bonds

isn’t in our sixties,

but in our twenties.

A better strategy is to apply

a modern portfolio theory model to innovation.

One that is goal based and diversified,

irrespective of short-term market conditions,

but rather the “desired lifespan” and time horizon of the company.

Outlearn Your Competition

Building what customers want is key.

But customers don’t usually know what they want.

Uncovering this requires you to learn what customer do,

versus what they say they’ll do.

Outlearn your competition and you win.

One of the best ways to learn is to teach.

Teaching forces you to crystalize your thinking.

It leads your customers down a journey

where your goal is making them the hero.

Along the way you uncover what they need

versus what they say they want.

Outreach your competition and you win…

Go Only as Fast as You Can Learn

Speed is key,

but simply going fast on everything

will only get you lost faster.

Going fast burns up resources.

What you think you are gaining on time,

may only be an illusion as you race ahead in the wrong direction.

Backtracking and then course-correcting costs even more.

At the earliest stages of an idea,

you don’t need acceleration,

but deceleration.

Rather than speed up tasks per unit time,

Maximize learning per unit time.

Simple Models

Albert Einstein predicted the speed of light

from the comfort of his armchair.

He formulated the Theory of Relativity

without running a single empirical experiment.

Years later, he attributed his breakthrough insights,

not just to math and science, but to his simple mental models.

These models were built on everyday objects

like trains, clocks, and elevators and

helped him run hundreds of thought experiments

against problems in the current Newtonian model of the universe.

As I studied other scientists,

I found the same pattern:

Scientists first build a model.

Then they use experiments to validate (or invalidate) the model.

Entrepreneurs need simple models too.

Both the Lean Canvas and the Customer Factory

are such models.

Like Einstein’s models, they are simple and

help drive focus on specific problems

in complex and unknown environments.

Plan Before Doing

My younger self was more driven to

doing over planning.

My older self is more driven for the right kind

of planning before doing.

In Running Lean, for instance,

I prescribed getting outside the building

as quickly as possible.

But simply getting outside without a plan

can be a recipe for burning needless time, money, and effort –

while you try and make sense of weak signals in the noise

that is the terrain of qualitative learning.

Simply getting outside without a goal

can be a recipe for achieving sub-optimal results –

while you spend the same resources to chase hill tops (local maxima)

and potentially miss neighboring mountains.

The Lean Startup prescribes

Build -> Measure -> Learn

which also has a strong call for action

with the goal of learning.

The original “lean thinking” has a step before building (or doing)

that in our exuberance for action we skipped…

This is the Deming or PDCA loop:

Plan, Do, Check, Act.

While doing leads to learning,

there are many things you can learn

from the comfort of your armchair

if you simply take some time to plan.

Like all the other steps,

planning does needs to be timeboxed

to avoid analysis/paralysis which is a form of waste.

But time spent on the right kind of planning

is time well spent.

Move the Free Line

Try before you buy is an age-old marketing tactic.

It gets people to experience what you have to offer

for FREE – before committing.

But when deciding what to give away,

we tend to give away our least valuable idea – content, feature, etc.

We want to protect our most valuable ideas behind a paywall.

Instead give away your most valuable idea.

This is the concept of moving the free line.

From your prospect’s perspective,

When they see how valuable your free stuff is,

They wonder how much better your paid stuff will be.

Getting your prospect’s attention is the initial battle.

Lead with your best foot forward.

Credit: Eben Pagan

Go Narrow and Deep

When you try to market to everyone,

you end up marketing to no one.

Rather than going wide and thin on features,

go narrow and deep.

Rather than going general on copywriting,

be specific.

Focus on early adopters,

not your total addressable market.

Definitely not your adjacent markets.

Going narrow and deep

does not shrink your potential market,

but grows it.

Specificity does not turn away adjacent customers,

but provides a reference model that showcases you at your best.