Silicon Valley distortions. What the technology is wrong in business | by Linda Z | November 2022

What Technology Gets Wrong in Business

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I knew a guy who profitably drove a business to $1 million in ARR…and now he wants to be a product manager at a tech company.

I was in disbelief. Most PMs would love to be the CEO of a profitable business. Why go back? His response: I don’t know what’s outside my bubble. I want to learn the craft of building great products.

He had a point. His products had weird color schemes, redundant copy, and a clunky user interface, not the polish of your typical trendy startup. But he had what so many fashion startups would kill for: happy, paying customers who support a profitable business.

Our conversation reminded me things people in tech think distort how business works. Our friend, let’s call him Steve, it is in a bubble, but so are we. ‍

Much of my time as a PM was spent on crafts. How do we make this look, feel and sound better for customers? We discussed pixel placement, names, and even the number of steps in a flow. But all in all, these little details seemed like ~the most important thing~.

But if the craftsmanship of the product is critical, what is critical? by? I assumed that it was always essential to the success of the business because customers prefer it to be easy to use and well done. However, there are successful businesses whose products are notoriously clumsy.

This is my theory: customers are picky when they can be picky. When customers are highly sought after, they have many solutions to try, so every visible advantage matters. Selling cool stuff to cool people definitely takes skill.

But the point of building a lasting business is to escape the competition, right? To find overlooked spaces instead of flocking to the new and trendy. So, focus on spaces where the craftsmanship of the product is critical early on can lead to further brittleness. He’s doing business on hard mode.

The perfectionist in me enjoys crafting, sanding down edges, and getting things done faster. But now I understand that a hungry audience need crafts to start; they want something that works, and that’s a good sign.‍

Another common belief is that problem solving is the number 1 skill. If you can solve any problem that comes your way, you will always be in demand. While it’s true, the curse of success applies here: the better you are at solving problems, the more people will give you problems to solve, leaving you with less bandwidth to develop other skills, like finding problems..

Steve’s first exploit was finding a promising problem: people who had pain they were willing to pay to leave, who he could easily and profitably target because they were a hungry audience. And while the solutions had to work, they didn’t have to be masterpieces to break $1M in ARR. steve did the opposite selling cool stuff to cool people.

One drawback to working at successful tech companies is that people hone their solving skills at the expense of their finding skills. After all, once a company finds a gold mine, they hire people to extract as much of it as possible. Better solving the original problem is the most important thing. Another drawback is that many tech companies focus on selling cool stuff to cool people, exposing us to only the hardest slice of the universe of possibilities.

If you want to build your own thing, troubleshooting is the underdeveloped muscle. And the problems that your peers with similar skill sets overlook tend to be the most promising of all. Less competition = more time to develop an advantage, cheaper to acquire customers, cheaper to retain, and less need to create a masterpiece.

If you can find these opportunities and solve them, no one can stop you from doing what you want.‍

Paul Graham wrote about how every city whispers a message about ambition. New York tells you to make more money, Boston tells you to be smarter, Los Angeles tells you to be more famous, Silicon Valley tells you to be more powerful.

Each message is its own limited vision of success.

A few years ago, a founder, let’s call him Ed, asked me what I wanted to do in 10 years. I told him that he wasn’t sure, but that I liked the idea of ​​starting my own business. ‍

editor: Oh, how to raise money from venture capitalists?

Me: No, not that. Probably started.

Ed looked at me, stunned: well, how are you going to do that?

The irony was that Ed ran a B2B company whose clients were self-funded companies. Silicon Valley’s billion dollar or bust message prevented him from seeing what he had right under his nose. Bootstrapping was also a foreign concept to me.

Part of the problem is the connotation. Bootstrapping sounds sad like you’re saving pennies on the street. But the reality is that it’s about starting a business funded by paying customers, the real market, rather than investors betting on you eventually figuring out how to be self-sufficient.

Part of the problem is also not having enough model examples. Figma’s $20 billion exit is making headlines everywhere, but people aren’t hearing about Steve’s $1 million ARR deal. I have been looking for lean but powerful businesses and have found some inspiring examples:

  • Pedal Tavern grew to $8 million in annual revenue
  • Streamyard started at $12M in ARR with just two founders, then sold to Hopin for $250M
  • Nerdwallet kicked off during its first 6 years at $100 million in annual revenue

This does not mean that the startup is superior to the collection of money. It’s just that limited visions of success are everywhere.

There is always a prevailing message of what ambition is like. Inevitably, there is also a rat race of people playing the same games to win meager prizes. But it turns out that the prizes can be plentiful if we free ourselves to look beyond the well-trodden path of prestige.

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