Slow is Smooth, Smooth is Fast
In episode 63 of Pit Stops to Podium, Andrew Goldner discusses the path to systematic and responsible growth, and sums it up as "slow is smooth, smooth is fast".
Slow is smooth and smooth is fast is the way in which you find product-market fit and it captures the way you go-to-market more efficiently. When you start out systematic and intentional (smooth), that's how you ultimately get to fast.
Andrew kicked off his career when the Internet was first commercializing as a tech lawyer for Alta Vista, Yahoo, DoubleClick, Salesforce and others pioneers. When Google acquired DoubleClick, he co-founded a financial news business for the Thomson family and when they acquired Reuters and became Thomson Reuters, he became Publisher of Reuters News. He returned to America and early-stage tech in 2012 and then co-founded GrowthX, which is a venture fund which works alongside B2B founders in rising cities to help them find product-market fit.
If you’re ready to learn from one of the best, then buckle up and hold on!
Learning Precedes Revenue
A common mistake of going to market is selling to anyone who is willing to give you their time and/or money. In reality, not all revenue is created equally. Founders need to think about which potential customer types create a smoother, quicker, and more efficient sale that enables more learning and scaling.
"You're actually not doing any sales until you have product-market fit"
5 Steps to Product-Market Fit
The bedrock is knowing your ideal customer profile (not ideal company profile or persona). You also need to be able to identify what the process looks like by which you've acquired customers and revenue. In addition, you need to stress test it by asking yourself what would happen if you took away your product from the customer (i.e. how upset would they be?). Last, but not least, you need it to be economically rational, meaning do you at least have a 1:1 LTV CAC ratio.
"This has to something that your customer would really kick and scream if you were to take it away"
Do These Things to Find Product-Market Fit
One of the most important things you can do is to seek out all available resources to follow a systematic path. Also, learning to think of sales and marketing as less of art and more of a science is key.
For founders in particular, it's about bringing the right mindset to the challenge and being willing to spend time defining and running small experiments.
"Relatively few founders are failing because of no market need, what they're failing at is running out of money because they've wasted it wandering the desert without any understanding of how to identify the market need"
Connect with Andrew
LinkedIn: https://www.linkedin.com/in/agoldner/ (Andrew)
Brendan: Hey everyone welcome to Pit Stops to Podium the RevPartners podcast where we talk to execs who competed and won in taking their companies from high growth to high scale. My name is Brendan Tolleson I serve as the co-founder and CEO of Revpartners and I'm delighted to have you today Andrew Goldner of GrowthX. Welcome, Andrew.
Andrew: Thank you Brendan I am super grateful to be here with you and your audience.
Brendan: Well I think I'm supposed to call you my liege.
Andrew: You weren't supposed to say that while we were that was between us now I'm going to get loads of - - - from partners.
Brendan: Yeah sorry that was inconsistent I did sign an NDS I need to be careful what I say during this uh uh just teasing but Andrew for those um that don't know who GrowthX or don't know who you are I love for you to give a little introduction on on the company um and then we'll get into a little bit of your background and who you are outside of work so who's GrowthX?
Andrew: Yes at GrowthX we’re a venture capital fund we're investing in Rising City Founders in North America um and first we help and then we invest so we're all about making sure we help Founders avoid the number one mistake when building a company which is going you know building a product without a market need we try to solve that before we invest um and and again it's rising city Founders in North America that are B2B.
Brendan: So I I like to ask um folks in the VC world before you got into VC were you on the operating side give our audience a little bit of background on you.
Andrew: Yeah I've been in the technology space for a little over 20 years 25 years um I started out my career as a corporate lawyer when the internet was first commercializing which was just a wonderful time to be doing it um I didn't really know how to be a lawyer but I knew how the internet worked um and that gave me a really amazing opportunity um and so I did that for many years you know doing it for companies like Salesforce when they were founded in Alta Vista and Priceline and Yahoo I went in-house into double click leading up to the Google acquisition and then I did take on a number of of operating roles after transitioning out of legal roles into operating roles in media space um did it overseas and then landed back in the United States after seven years in Asia in the valley and that's where I was blessed uh to meet my co-founder Max at growth hacks.
Brendan: That's great well to your point you have I've seen quite a bit from when the technology is really booming in that internet age to where it is now so uh you certainly have unique perspective uh well Andrew before we get into the big idea and you kind of tease it out a little bit in terms of what GrowthX does uh however if our audience just to get our audience a little bit familiar with you who who is Andrew outside of work what are the passions the hobbies and interests that you have?
Andrew: Well you know for me number one is my family you know my wife and my two daughters you know are my entire world you know I really I'm very fortunate to to spend a great deal of time with them and so um yeah I mean you know frankly outside of GrowthX and and my family there's not a whole lot of time where I but where I do have some or I just need to go get myself some to remain centered um on long distance running and I'm also reading fiction I'm a an avid book reader um and so those are those are two of my really deep passions.
Brendan: What's the last fiction book you read?
Andrew: Um you know I just finished up uh the newest book by John Irving who's one of my my favorite authors in the world um I also just finished reading the new Barbara King solver who's also one of my favorite authors in the world so those were those were two of my recent books that I've read I love historical fiction um it's a great context for me to learn about the things that I should have paid closer attention into in school but rather than reading straight up history um I love historical fiction.
Brendan: That's great and uh long distance running like is that I'm assuming that's more is that a marathon are we talking longer than?
Andrew: Me you know what my my distance is half marathon I I have run the New York City marathon before and it was really one of my favorite days on Earth but my my distance is half marathon you know it's it's actually not that hard you know as humans we're actually built to be able to run that distance so any human doesn't have to work that hard I am not an athlete but I do have extraordinary discipline um and the thing that I have found out relatively later in life is you know the 13 Mile distance is really my yoga um I am the most relaxed uh the voices in my head stop um when when I run that kind of distance and so it really is just a form of relaxation because I also always do it out in nature and I think that's very important to to be in touch um you know with Earth to be around you know um all the creatures the trees the grass the leaves it just you know for me it really brings me back to Center puts things into perspective which hopefully enables me to to perform at a higher capacity and be happy.
Brendan: That's correct yeah for uh I think when people talk about leadership you need to be fit both physically and emotionally um and so that's a good example and spiritually potentially and that's a good example of you know what that does for you so thanks for sharing a little about who you are and what your passions are and it's great to hear the family and then ultimately uh when you have the free time outside that what that is filled by so thanks for sharing it's always fun to hear it in a space to to talk about those things that are most important to me I'm grateful for that all right like we try to say uh we have a value here do your best not your all and the concept is your identity is not in work alone and while that's a big part of who we are uh it's not the only thing um and so it's always fun to have that question um so Andrew just transitioning now into the big idea this is on the greatest transition to work but I think it's a it will work um and so you you mentioned a little bit in terms of what GrowthX does you talk a little bit about your background and I think it's a really good opportunity for our audiences we talk about that concept of high growth to high scale yeah and then you have you really need to have product Market fit um and so you have this kind of line uh slow is smooth and smooth is fast uh and so we're trying to use the word slowed down but so what do you mean by slow is smooth and smooth is fast?
Andrew: Well let me first give credit where credit's due I've I've now two layers of stone that um the the the original that quotation gets gets uh the the credit is is often gated to the Navy Seals no I don't know if that's actually true you look up on the Internet there's not definitive evidence but it's generally understood that the Navy Seals came up with that I stole it from my partner Max who uses it more often than I do but it really is the big theme for GrowthX and how we first help and then we invest and and I think to be perfectly honest Brendan it really is meant as a contrast to move fast and break things um we think that that's bad advice you know we think that it came from a privileged place in a different time um and so when founders are go to market which is you know where we focus it's not about good apart product it's go to market you know the idea that slow is smooth smooth is fast is is the way you actually find product Market fit and we're not implying that you don't work as hard we're not saying that you're not going to be grinding Around the Clock trying to win especially if you're trying to win an adventure context which is very big very fast so it's it's not intended to to mean relax um you are still running a marathon at a Sprint Pace um but it really is meant to capture the way in which you go to market more efficiently is you you start out systematic and intentional smooth because only through smooth then you then get to fast so that's that's really what it's intended to imply to our founders.
Brendan: I love that and well since uh I will start I started using it and I will give you credit to the max into the seal so well it's kind of a Snowball Effect uh well let's break that down a little bit Andrew I think it's such a powerful concept and to your point it doesn't it's not saying we don't do certain things it's just um you know so you talk about the system and being responsible so as we break that framework down let's first start with this big idea or kind of the first concept within this which is learning precedes Revenue um and so what does that mean from a GrowthX perspective and how you coach uh Founders or early stage companies on on how they should be learning?
Andrew: Yeah well listen any founder who's out there that does not have product Market fit every dollar of Revenue ninety percent of the value of that dollar comes in the form of learning and only 10 of the money in your bank that's really important now that's going to change over time post product Market fit I'm hoping everybody's a lifelong learner but at some point you're going to see that flip and ninety percent of the value of that dollar is going to be the money in your bank and 10 percent of is going to be your learning but when you're on the path or trying to get on the path to product Market fit which is again it's not Revenue revenue is one of the indicators of product Market fit but is not this positive of product Market fit so we're not just talking about stacking up a certain amount of dollars to the point that you quote have product Market fit right revenue is very important but it's not just about getting that Revenue especially now right because it needs to be towards profitable Revenue right it needs to be something that you get better at that you can systematize that you can find repeatability and yes some people you know are going after that Holy Grail of predictability if you can really get there but the idea that learning precedes revenue is because not all revenue is created equally and what we're telling our Founders is avoid the most uh common mistake when going to Market which is just selling to just anybody who's willing to give you their time and potentially their money that is a highly inefficient way to go and yes over the last 10 years Venture Capital has subsidized a lot of that bad behavior but it doesn't mean that it's a good way to go and now that Venture is receding it's going to even be more important that Founders think about um of all potential customer types and use cases based on a variety of characteristics and the things that you learn in the process what are the ones where the sale goes more smoothly more quickly more efficiently where you can learn about it and you can scale it more and get to profitability and again this is not an invitation to over engineer but if we're willing to admit that not all revenue is created equally if we're willing to sit back and say of all the potential people who might have the problem that I am looking to solve because we're being problem focused and not product focused I think we can all agree that not every human on earth who occupies any role at any company of any size of any place is going to have that same problem to prioritize it in the same way to feel it as equally as acutely to be as what it does for them professionally in the same way right and so knowing that what we're trying to do is dial in as best we can as efficiently as we can where based on a hypothesis it's going to work just a little bit better than it would otherwise because that's really where we want to spend more of our dollars and more of our time and so when we think about learning when we think about revenue and this is all pre-product Market fit the thing we like to tell our Founders is you're actually not doing any sales until you have product Market fit that's not to say you're not selling your product but pre-product Market fit you're doing customer development and Market development and only when you have product Market fit are you doing sales and marketing and the difference is that sales and marketing is the pursuit of revenue for the purpose of profit you have something scalable you have the Playbook you need the VP of sales right synonymous customer development and Market development is the pursuit of revenue for the purpose of learning.
Brendan: I like that sequence because I was going to say you know I think a lot of Founders would say in theory that's a really nice kind of concept but I need to survive and like I need to generate Revenue um and so I like how you just how you concluded that with that customer development and then you're saying hey it doesn't mean you're not selling but when you think about ultimately when you're trying to create Cloud Market fit to drive sustainable Revenue which ultimately impacts profit um there's a distinction there.
Andrew: So I really liked how you summarize that and you you've also said something very important there Brendan if I can hop in you talked about listen I'm a Founder I just need to survive Hey listen I totally get that I'm in that same exact boat you have your green zone your yellow zone and your Red Zone don't ever get into the Red Zone if it starts getting a little bit orange you have to change your behavior Venture when you get people to believe in you and what you're doing and that you can go big fast is enabling you to be in that green zone that really special place where you can do what is absolute right for the business long term but if you're bootstrapping or if you're at the end of your Runway from The Venture you've raised and you need to stay on the playing field by all means you no longer are just selling to your ideal customer profile you're selling to everybody who's willing to give you Revenue you're taking on Consulting projects you're doing a side hustle you're doing whatever you you need to stay on the field I'm really talking about the people that are in that green zone whether it be 30 days 90 days 100 days their own money their friends money or Adventures money that's that's really the place that I'm talking about.
Brendan: I think it's a good transition so let's talk about that green zone so you either kind of five steps as it relates to product Market fit I'd love for you to educate but Primark if it's a buzzword and people say a lot but I like how there's a prescriptive hey here are the five steps to know that you have it so to be in the green zone what does that mean to you?
Andrew: Well I mean listen you know being in the green zone is is an exercise that I think every founder needs to go through with their family and their co-founders and it's going to mean something different for different people you know really the best way to measure it is the amount of money you have in the bank divided by the amount you're spending each month and and then how you determine how close to that edge you want to get because you know we talked we started out this conversation and really what we were talking about was healthy sustainable non-violent balanced living psychologically people have to be well if they're going to be great Founders Founders don't understand that their Wellness is an asset of their company it's not just important who they are especially when they take outside Capital so different people have risk tolerances that change so I think the definition of someone's green is gonna is gonna change and Vary but I think to your question about you know product Market fit it is not a Feeling you know we we think it's disastrous that if you Google “what is product Market fit?” you get things as obnoxious as as as Venture capitalists saying if you have to ask you obviously don't have it right or you you this is a phrase that gets forced down the throat of Founders globally but nobody's helping him Define exactly what it is and for us it's five objective things and you go through them step by step and yeah the no surprise the first thing the the literally the Bedrock of the path to product Market fit is what is known as your ideal customer profile this is not your Ideal Company profile this is not a Persona which is a thirty thousand foot view this is again as my partner Max likes to say and does so very effectively we need to get to a person and understand the keystrokes of their Professional Day so that we can get as empathetic as we possibly can and understand that workflow to then begin seeing if we're a good fit if they have the problem and so forth so that ICP which we also colloquially refer to as your Mr or Ms right now which is different than your Mr or misses right it's just a narrow customer type and use case this is where you admit that not all revenue is created equally and through a scientific approach that's you know more science and and less art form using hypotheses your intelligence your intuition your experience your relationships your acumen you go through a very systematic and intentional process out in the market just not inside your own startup building or garage where you begin to test and see of all potential people that have the problem that you can solve now not your product roadmap but now who are the ones that again are more aware of the problem prioritize it higher feel it more acutely the downside of not solving it is larger right and in the most practical and tactical terms take that large surface area because as a Founder you're excited about all the different ways you can help people and all the different people you can help and narrow it down to where it's going to work the best right now which is a combination of your team and your product and the customer their problems their workflows their use cases in their situation and make sure you start orienting towards that narrow customer type and use case it's the most important step any founder can take on the path to product Market fit from there right it's a matter of going through the steps to know as you go through one or a few of these customers what has the process looked like by which you've acquired this customer and acquired that Revenue did it follow the similar use case and customer type did you notice the patterns emerging about the journey that the customer took from stranger to customer did you notice the pattern emerging about how you attracted them into the funnel the conversational framework that you used in the literal words of the conversational framework to attract them closer the value proposition and the selling proposition that was really where they bit and where it made sense because again this can't just be random you have to be thinking about how this can potentially become a pattern and improve over time once you've done that a couple of times you've got a stress tested what would happen if you took this customer it took your product away from the customer if they're not kicking and screaming then I'd say you're not on the path of product Market fit right this this has to be something that your customer will really kick and scream if you were to take it away um and it can't just be happy customers again being intentional being scientific thinking about this as the same as a scientist who's putting chemicals in a Petri dish and paying close attention to the outcomes and learning and seeking the truth you also have to know that and be aware that your customer can for you can can express and can communicate in clear terms you know what were the objective reasons did the value that you promised match up to the value that they received and didn't have that intended impact on their actual professional responsibilities that they will get measured on at the end of the year quarterly whatever the case is right and then of course the last thing is you need it to be economically rational this isn't where you start saying hey do I have a three to one LTV to CAC ratio this is the point where you say hey do I at least have a one to one LTV CAC because again the earliest stages your Revenue can be unprofitable from a dollars and cents perspective as long as the learning that you're receiving and paying attention to and benefiting from is getting you on the path towards profitability that's what unprofitable Revenue should be used for.
Brendan: I like that in terms of creating the steps that are objective steps you know kind of talk about the scientific aspects of it uh and getting rid of the emotion I like the idea that Mr Mr Wright Mr right now just understanding is like the ideal customer versus Ideal Company uh I'm making that very clear having a repeatable process you talked a little bit about so you can actually scale it stress test it understands is it nice to have versus a must-have for your customer and then what is the path to getting to that lifetime value to your point it doesn't have to be today but the learnings allow you to take it from that kind of one to one or maybe it's close to that to ultimately that desired three to one uh which is great so let's transition a little bit into the last thing uh Andrew is people are saying okay those are the steps um maybe I'm not at based off these definitions I don't think I'm there yet um so what should they do to find and figure out how to to capture this product Market fit concept?
Andrew: Well I mean you know I I think you know certainly they should Avail themselves of the Continuum of resources that we purposely make available to them um the the reason that we do that for Founders is because we want to earn the right to invest in them and it turns out that helping them is an enormously more beneficial form of due diligence than a couple of conversations a couple of meals and a top-down total addressable market analysis um and so you know I would certainly want to turn on your your audience to growthx.com and our blog and of course our main platform the revenue accelerator but um you know again the what they need to be doing is seeking out all available resources they can to follow a systematic path the reason that we have a Continuum of resource to growthx.com is we've sequenced the path to product Market fit and so I'm encouraging your Founders to think of this as sales and marketing as less of an art and more of a science for your product Founders they are going to be naturally better at this because it really does follow an engineering approach there really is a framework a system a lexicon and a set of tools but I would say that you know again part of it is also the minds that they bring to the challenge this is not about scale you know this is not about going out and putting together a mark on tech tech stack or hiring a VP of sales because we need to fill the top of our funnel because if you fill the top of your funnel before you've satisfied and solved for a good signal to noise ratio you're going to end up filling your funnel with a bunch of noise which is Public Enemy Number One for a startup every founder listening to us today is also the balancer at the hottest nightclub in the world and their nightclub is their calendar they have to work that Velvet Rope and be careful about who gets on that calendar and so spending time defining and running small experiments this is not an invitation to overthink and over engineer this is just an invitation to stop throwing spaghetti at the ceiling and hoping some of it will stick and start with some of the first principles that form your hypothesis and again say of all potential people that potentially have this problem that I could solve what is logically the characteristics that would lead someone to have this again more acutely more dynamically more painfully more currently and just begin starting running those small experiments slow is smooth smooth is fast but when you go out and your first instinct is to list build your first instinct is to you know spam strangers with email or phone calls you know without truly understanding what that framework is going to be for having the conversation and knowing what you need to learn from them because you're pursuing revenue and not learning this is literally the number one reason why over 40 percent of the companies that fail fail for this reason CB insights and others like to publish it as no Market need but we know that's actually not true relatively few Founders are failing because of no Market need but they're failing at is running out of money because they've wasted it wandering the desert without any understanding of how to identify the market need it's out there but you run out of time wandering the desert looking for it and so again I think the the whole the whole approach that free product Market fit your activities are oriented towards learning does not mean you will not get revenue from it you just need to think of Revenue as a completed learning cycle the last thing I'll say quickly is if ninety percent of your value free product Market fit of a customer is learning and not Revenue Founders need to wake up and realize that closed loss is 90 as valuable as a closed win all you're missing is the 10 of dollars that would go in your bank stop leaving that value on the floor stop coming up with excuses and being defensive about why it happened and ignore the opportunity to learn why someone wasn't a good fit or why they perceived themselves not being a good fit there's enormous amounts of learning to be had there as well I really like that it reminds me so Mike is one of our investors from Garden City and his saying or the saying he likes to use is companies don't die from starvation they die from indigestion um and it reminds me of what you're just describing is uh folk like you have you have customer insights you have customer data of active deals to give you Clarity and and that's where you need to focus and not be distracted by all these different noise two-point uh the signal to noise ratio of getting just distracted by the top of the funnel so it's a great and I I I love that quote you know we say that Founders don't die of starvation they die of overeating you know indigestion is absolutely the same thing and I love it um and yeah I mean listen I I think it's important I you know I invite your Founders to think about the Frameworks they follow to go to product and think about the Frameworks taken follow to go to market.
Brendan: Well you gave me a saying so I gave you a saying it's a fair trade so as we wrap up Andrew uh I really do appreciate the time I really love these insights I know our Founders are going to benefit from that if they want to learn more about growth Stacks you mentioned a few resources but where should they go or how should they contact you?
Andrew: Yeah I appreciate that they they can find us at growthx.com that's the best way to understand our approach to practicing you know Venture Capital um and that is that we want to earn the right to invest in Founders by helping them go to market that is our approach there's enormous amount of resources there again the main one that I mentioned is the only program that's 100% dedicated to helping these Founders solve for go to market and it's called the revenue accelerator we run it quarterly they can find all the links they want and all the information they need including access to our full platform if they want to check it out because it's important to know for your your your audience we're not just experts we've taken our expertise and created a system a product and a platform and then we surround them with expert coaches that work alongside them in the weeds and that's really where those real Revenue results come from and that's how we earn the right to invest um so yeah I mean uh you know on on LinkedIn you can find me under Andrew Goldner you can find us under GrowthX we would be grateful for the opportunity to hear from anybody in your audience that thinks that we're a good fit now we could be helpful to them and in that process or in the right to invest in them.
Brendan: Well I think you will hear from some of our Founders as a result of this at least I hope you do and I probably will steal that tagline because I really like that concept of earn the right to invest um Andrew thank you again I really do appreciate it and we'll be in touch.
Andrew: Thank you Brendan I'm again super grateful to you and your audience