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  • Writer's pictureMatthew Lerner

Sevens Kill Companies

Sevens Kill Companies

In the 4th week of our Coaching Programme, we’re digging into prioritisation, experimentation, and how sevens kill companies.

Sarah Tavel from Benchmark Capital mentioned this on the Knowledge Project podcast, and I can’t stop thinking about it.

Level 1: On the surface, Sara was arguing for essentialism in hiring and firing. If you score your team members on a scale of 1-10, then 4’s are easy decisions, and so are 10’s. But 7’s pose a dilemma because they add value, but they fill a seat that could go to a 9 or 10. She argues we under-value the opportunity cost, plus tens want to work with other tens.

Fair point. But the truth runs much deeper.

Level 2: If you’ve ever been part of a really successful startup, it’s obvious in hindsight that 90% of your growth came from 10% of your projects. So, you need to find your 10% fast, and focus on it to the exclusion of everything else.

For example, at PayPal, all of the early growth came from referrals & eBay. Next wave was developers, shopping cart referrals, and direct sales to a few verticals. That was it - all of PayPal’s growth came from 5 things. We did tons of other stuff. Tons! Most of it was a huge, expensive distraction. But we could afford it, and little startups can’t.

If resources are tight, and if 90% of your results will come from 10% of the stuff you do, then you need to focus on tens and avoid sevens. (That’s hard because working on sevens feels like progress!)

Simple next steps

Look at your growth backlog, and for each idea ask yourself “If this works, could it be really big?” If the answer is “no,” then stop wasting time on it.

For extra credit

Sevens are all over the place:

  • Metrics: We look at a gazillion numbers, but only a few really help us understand the business.

  • Product features: A truly disruptive product will only do one or two things well. What are those things? (To understand the fully loaded cost of a new product feature, check out my post Start with No.)

  • Meetings: If you look at your schedule for last week…which meetings really helped drive growth for your business or team?

  • Partnerships: Most opportunities will be a distraction, but if you can find one that really works…

Startups only have 3 advantages:

  1. Smart

  2. Fast

  3. Nimble.

And Sevens destroy all 3.

Seven talent. Seven projects. Seven metrics. Seven meetings. Seven partners.

Sevens kill companies.

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