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Growing Fast And Slow

~2 mins read

https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-ben-and-jerrys-vs-amazon/

Building a company? You’ve got one very important decision to make because it affects everything else you do. No matter what else you do, you absolutely must figure out which camp you’re in, and gear everything you do accordingly, or you’re going to have a disaster on your hands.

The decision? Whether to grow slowly, organically, and profitably, or whether to have a big bang with very fast growth and lots of capital.

The organic model is to start small, with limited goals, and slowly build a business over a long period of time. I’m going to call this the Ben and Jerry’s model because Ben and Jerry’s fits this model pretty well.

The other model, popularly called “Get Big Fast” (a.k.a. “Land Grab”), requires you to raise a lot of capital, and work as quickly as possible to get big fast without concern for profitability. I’m going to call this the Amazon model, because Jeff Bezos, the founder of Amazon, has practically become the celebrity spokesmodel for Get Big Fast.

The worst thing you can do is fail to decide whether you’re going to be a Ben and Jerry’s company or an Amazon company.

If you’re going into a market with no existing competition, lock-in, and net effects, you better use the Amazon model, or you’re going the way of Wordsworth.com, which started two years before Amazon, and nobody’s ever heard of them. Or even worse, you’re going to be a ghost site like MSN Auctions with virtually no chance of ever overcoming eBay. (Read Wordsworth’s reply )

If you’re going into an established market, getting big fast is a fabulous way of wasting tons of money, as did BarnesandNoble.com. Your best hope is to do something sustainable and profitable so that you have years to slowly take over your competition.