The Science of Growth

Book excerpt: In The Science of Growth, venture capitalist and Carnegie Mellon professor Sean Ammirati tackles the dos and don'ts of successful scaling, by looking at the startups that have won—and lost. The lean entrepreneurship movement has captivated Silicon Valley and entrepreneurs across the country. It's provided an agile framework to develop the right product solution for a given target market, and is now used by almost every fledgling company to do just that. The next challenge is growth - to achieve the financial returns and, more importantly, the impact they dreamed of when starting off on their adventure. Why do some companies realize the VC's goal of a 10x return on investment, while others flounder? What differentiates the companies that become part of the fabric of our lives and remain responsive, no matter how big they get from those that quickly fade? To find out, Ammirati looks at 20 different companies in pairs, who have achieved product-market fit at about the same point in history with the same general target customer-one of which has gone on to achieve real scale, while the other languished. As his research reveals, just a handful of choices-among them, who to partner with, how to finance growth, and how to use data-make all the difference in the world. With such intriguing examples as LinkedIn vs. Spoke, Facebook vs. Friendster, and McDonald's vs. White Castle, Ammirati shows the secret of "the science of growth" and how to cultivate it in any organization.