Jason Cohen, founder of WP Engine, has a great new post up titled The Lindy Effect on Startup Potential. I had dinner with Jason a few years ago before a Capital Factory Demo Day and he’s as thoughtful and passionate in person as he is in his writing. The idea in this most recent post is that the Lindy Effect, understood as the expected lifespan increases according to the length of its current age, directly applies to startups. Said another way, the longer you’ve been doing something, the longer it’s going to last.
My favorite part of the post is where Jason applies the Lindy Effect to startup growth when he says:
You can probably double your size, doing roughly what you did to get to this point, but 10x will require innovation.
I’ve seen this happen several times. A startup achieves product-market fit and a solid repeatable customer acquisition process. Everything looks great, and then at a certain point, the growth stalls as the primary lead generation channel only has so much capacity, no matter how hard it’s pushed. Just like the lead velocity rate is the most important metric in SaaS, if the primary lead source peaks or additional quality lead sources aren’t found, growth won’t continue.
Doubling the current size is likely but getting to 10x the size requires innovation.
What else? What are some more thoughts on Jason’s post and the idea that 2x growth is likely but 10x growth requires something new?