Insight from Charlie Munger.
Charlie Munger died nearly one year ago at the age of 99.
His net worth was $2.6B then, thanks to his uncanny ability to identify companies to invest in and not get spooked by short-term volatility.
One of his mottos often rings through my head.
I think it does because it’s at odds with what we generally talk about here at DC.
The motto is:
It's not about the big picture.
It’s about the work on your desk.
Do the work in front of you and do it well.
And because this newsletter is all about growing startups, I feel it’d be a disservice to all of you if I didn’t occasionally pause from talking about the nitty-gritty marketing and growth tactics to truly focus on what matters:
Your product is by far the most important thing.
Let’s analyze the situation where you do lousy work/your product isn’t very good:
- People stop using you (churn is high)
- People talk about it
- You never get referrals
- You never have good reviews, testimonials, and case studies to use as social proof to close people
- Your reputation proceeds you, reducing the odds someone becomes a lead, signs up, or buys
- Your cost of acquisition increases across the board
- You have to invest more and more into marketing to make up for the poor organic growth
And in contrast, let’s say you have an exceptional product:
- People keep using you (churn is low)
- People talk about it
- Referrals drive a significant portion of your revenue
- You’re able to collect great social proof
- Your reputation proceeds you, making anything you launch convert better
- Your cost of acquisition decreases across the board
- You can invest in marketing to make things grow even faster rather than try to fight the tides. And when you do, it’s more effective.
Marketing should be about getting the word out about an amazing product—not making up for a bad one.
This is why our agency is selective with who we work with. It doesn’t matter how good our ads are if the product isn’t good. It’s setting ourselves up for failure, and our clients up for disappointment—ruining our own product in the process.
So really, the best growth tactic I can and will ever give is:
It’s about the work on your desk.
Do the work in front of you and do it well.
Consider this your primary mission as a founder
So please please please, if you’re a founder, get deeply involved in your product/service. Know it better than anybody else. Be brutally honest about how good it is and where it falls short. Obsess over making it better.
Most people are terrified to look too closely and start asking hard questions. Be one of the brave few who do.
And remember, no one will ever care as much as you, the founder. You have to be the one to go the extra mile to make it exceptional.
So, in short, do everything you can to consistently increase the average satisfaction of your customers.
Do that, and you’ll see more organic growth.
Do that, and all of these growth tactics we have covered and will cover will work significantly better.
Thanks for reading, and back to the regularly scheduled growth tactics next week.
