You Can’t Make Incremental Changes and Expect Exponential Results

You might already be filing this away in the “well, duh,” category, but don’t close the browser tab just yet. Sure, the title seems logical, but this site is called Obvious Startup Advice for a reason. You wouldn’t believe how many business owners tell me things like “I don’t want to change anything, I just want way more success.”

It would be great if one day we all could wake up with our sales through the roof and our products running smoothly without having to do a thing. But that’s magical thinking, and hope is not a viable business strategy.

It’s an easy trap to fall into. Especially during times of great change that is mainly outside of our control (i.e., COVID-19), there’s a strong pull for almost every founder to just keep pushing in the same ways that were working before, even if they’re not working at this moment, with the hope that things will eventually go back to normal and the old strategies will prevail. 

Nine months ago, a client of mine was headed into the year prepared to double his company’s revenue. Then the pandemic hit and it hit his business hard. In March, he had seven months of runway and hope that things would turn around quickly (remember 15 days to crush the curve?) Now he has three months of runway left, and he’s still refusing to make needed changes to his staffing. His sales and marketing teams are of little use to him right now, as they’re trying (and failing) to sell his old product while he figures out how to sell a new one. But when we discuss letting them go, he constantly comes back to, “I just want to give them one more month to figure something out.” He might as well ask them to start pulling rabbits out of their hats. 

I understand his frustrations, though. He didn’t do anything wrong, he didn’t fuck up. Something he didn’t cause fundamentally changed his market, and his company now exists in an entirely different landscape. For many founders, the number employs is a (bullshit) indicator of success. If this CEO has to lay team members off, he’ll feels like he’s failed. In his mind, he has three more months of hope that he’ll achieve different results and won’t have to do anything that makes him feel bad about capabilities as a CEO. But he’s also three months from going out of business entirely and he’ll really feel about himself then.

It’s not just a fear of failure though. After all, if founders were afraid of failure, they probably wouldn’t be founders. It’s often more a comfort with what’s comfortable. When a founder presses a button and gets a desired result, they quickly stop caring how that button actually works. So even when they stop getting the desired results, they keep pressing that button, hoping the inscrutable machine starts working again. 

A founder I briefly worked with last year was in just that situation. Over the course of ten years, he had scaled his business to $5M in annual revenue. Not bad for a bootstrapped SaaS company with no desire to go public. What was particularly amazing is that he really didn’t understand his customers’ needs very well. His home page proudly displays a Who’s Who of Fortune 500 logos, yet when asked “how does Toyota use your product?” he has no idea. But, hey, nothing trumps traction.

Unfortunately, in the last four years, they’ve gone from $5M in revenue to… $5M in revenue. It was obvious that he needed to make changes to his sales process. I suggested he begin by better understanding the most common uses for his product and develop an outbound sales strategy strictly focus on prospects in those verticals. The founder refused, saying he had successfully grown his business through organic traffic and it was important that prospects feel like his product can do anything. He just wanted to “change some marketing copy on the site” and double revenue.

This founder got really comfortable pressing a button that predictably spat out $5M in revenue every year. It was inconceivable to him to consider starting over with a new process that might not work. The conflict wasn’t that he unable to change his plan, it was that he wanted to keep running that plan and generate significantly more revenue. As you may have heard, the definition of insanity is doing same thing over and over and expecting different results.

There are a few founders who nail their sales playbook early and and just keep scaling by throwing more bodies at the same sales and marketing processes. They’ve figured out how to reliably grow, and have moved their business successfully through the startup stage to operationalization, maybe even maintenance. That’s the dream. But don’t plan on it.

The long-term consequence to not changing is that you’ll stay the same. Companies don’t exist in a vacuum, and eventually another company will come along, a market shift will occur, a global pandemic will pop up. At that point, you have two choices, a) take the uncomfortable step of figuring out what isn’t working and make the necessary changes, even if they’re big ones, or b) give in to your business neurosis, refuse to adapt, and die.

Imagine being the CEO of Blockbuster in 2000. He turned down the option to purchase Netflix for $50 million that year (Netflix’s current valuation: $223 billion). By 2007, Blockbuster was failing to compete with Netflix, which had only just launched streaming and was still mainly DVDs-by-mail. 

In a lot of ways, Blockbuster tried to adapt. They started offering DVD subscriptions in 2004, and even acquired a streaming video service called MovieLink in 2007. But what they couldn’t give up were their retail stores, which hemorrhaged money across thousands of locations, and the executive team kept pressing the “rental store” button until the last Blockbuster became an Airbnb this year

Next week, we’ll dive into how to identify when it might be time to change gears at either a corporate or team level.

— Eric Marcoullier

Welcome back, Constant Reader. I spent the summer growing my coaching practice, camping with my two sons and developing a new passion for archery. I hope you were equally productive.

Who knows when things are going to “get back to normal”? I sure don’t. Even so, companies are experiencing success and it’s time to focus on what it takes to start and grow your business. It like having a kid — there’s never a good time, so you just have to jump in with both feet and make the best of it.

If you are getting your company off the ground and feel like you’ve hit a brick wall, please send me an email at or check out my coaching web site.

(Photo by Alex Brisbey on Unsplash)

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