Startups are hard, and winning is often determined by your ability to solve really hard problems and gain an edge in the market. Hard problems come in many forms, however, and require different approaches. Here’s a framework for how I think about bucketing challenges into different categories, each with its own set of considerations.
Harvesting Strawberries
Some problems are like harvesting strawberries. For the uninitiated, strawberries are harvested one-by-one, by hand – a process so laborious that farmers have had to invent hilarious devices like this one to reduce back strain while the strawberries are being picked.
Farming equipment or bondage device – who can say?
Harvesting problems have straightforward solutions and no shortcuts: You just get a big basket and pick every damn strawberry in the field. You solve these problems with pure perseverance, slogging away for weeks, months, or years until they are done.
Examples in tech include all sorts of problems where the payoff of each incremental unit of progress is small, the required effort is very well established, and the risk of outright failure is virtually nil:
- Fixing essentially all common bugs in your product
- Integrating with every single partner on the planet – for example, supporting partnerships with every data warehouse that a customer has ever asked about
- Building a wide array of unsexy but highly necessary features – for example, building all of the security or compliance bells & whistles on a typical enterprise RFP
- Replatforming onto a known better architecture
- Optimizing the hell out of a product that is already working well, and that has highly trustable quality metrics – think about Google optimizing their search results page, or Amazon optimizing their product pages
When the stars align and harvesting is going to provide significant value, harvesting problems are often the best places to apply effort, because they can be solved with pure perseverance. This means that they are highly tractable – although it can take months or years, you just need to show up.
Fishing
Some problems are like fishing. You know that there are fish out there in the ocean, but you don’t know exactly where. If a great fisherman knows where the hungriest fish are and how to set their lines just right, they might catch everything that they need in a few hours. Fishing problems can sometimes be solved shockingly fast by motivated teams with a bit of luck.
If you get unlucky and the fish aren’t biting however, you might catch very little. Even great teams sometimes don’t catch anything or catch it very slowly. But in the long run, you should expect some amount of return – after all, there definitely are fish, and they definitely do live in the ocean.
Examples include most problems where you’re trying to do something new or different, but in the same general area as what your business does already:
- Finding cost savings
- Building new, adjacent products that can be sold to your customers
- Building feature differentiation – particularly finding significant performance or usability upgrades that help your existing product to stand out, or inventing new functionality that is hard to copy
Fishing problems are some of the hardest problems to solve, because they require skill and have an element of unpredictability. They also have more opportunities to differentiate, because you can be a much better fisherman than someone else (it’s hard to be an order of magnitude better at harvesting strawberries), and market experience matters (you know where the fish are).
As a result, being really good at handling fishing problems is often the foundation of how companies win. You get really good at adding new revenue lines; really good at making your products amazing; really good at figuring out where your market is going and how your product-market fit will need to evolve.
Panning for Gold
Some problems are like panning for gold – going out to a river or stream where there might be gold, getting your pan out, and seeing if you can find traces of the shiny stuff in the sediment. If you find gold, you can become generationally successful – think of the massive moats created by Google Search or the AirBnB network.
But unlike fishing, panning for gold often returns absolutely nothing, no matter how skilled or determined you are. If you are trying to pan for gold in the wrong place, it’s just not going to happen no matter how skilled or determined you are.
Examples of panning for gold include any leap forward that will reshape your business, but carries very high risk of being completely unviable:
- Figuring out how to sell to an entirely new buyer
- Finding a technical breakthrough that others can’t copy
- Crafting a new business model (for example, Nvidia pivoting from graphics cards for gaming to datacenter optimized GPUs for AI)
Strategic Considerations
This framework leads to a few different strategic implications.
Sometimes the payoff for harvesting is very high, and you really want to lean in when that happens. Recall that the problem with harvesting is that the payoff is typically marginal, but the upside is almost guaranteed with perseverance. Harvesting problems can seem trivial but are actually a gift as they’re a road to success that doesn’t involve randomness.
Harvesting problems are generally less sexy than fishing or panning for gold, but they’re no less important. In many cases, due to its near-guaranteed marginal value, great execution at harvesting is the fuel that lets a business extend its lead. It’s essential for leadership to show that there is honor and value in harvesting:
- People on teams that do a lot of harvesting need to get promoted; these teams can’t be a dead-end.
- Public recognition for harvesting problems is essential. I find that it’s often valuable to really describe exactly why these tasks are important to reinforce their value.
- Everyone should visibly do some amount of harvesting; it shouldn’t become janitorial work.
- You need to make sure to hire people with grit.
Fishing problems are very important because they’re one of your best chances to differentiate by having a stronger and more agile team – which are exactly the advantages that startups have over incumbents. Send five teams to figure out how to meaningfully level up your product; if enough of them succeed you’ll gain a major edge. But fishing requires strong leadership:
- These problems usually require the strongest leadership support because they’re stochastic processes that can have long periods of failure in between successes. If you’re trying to dramatically cut costs, it’s very possible that after 3 months you’ll only have a few small wins and many failures. Strong leadership is the only way to have enough conviction to push through (potential) early failure. This is why performance improvements, usability improvements, or cost savings often require a top-down mandate to be successful.
- The leaders making the push also need to be very high-context, because they need to be tolerant of good execution and subpar results, and intolerant of poor execution regardless of the results.
Fishing problems also require a lot of skill – fishing is hard. If you have a super talented team, you can tell them “go find us some fish” and they’ll succeed. This is basically how most great startups hit their stride in the early days – with independent teams doing anything they can to come back with full nets. The best companies are often really great at fishing.
Fishing and harvesting can look similar because they can both involve a lot of slogging to get to success. But while harvesting requires top-down control to make sure that people keep harvesting, every catch is exciting and motivation is typically easier to find. Fishing also requires distributed control so that the most skilled anglers can get out on the ocean without someone looking over their shoulder the whole time – as a result, teams in fishing mode require a much more bottoms-up leadership model.
You should basically never rely on panning for gold. Any plan that looks like “we’re going to go to that river and pull out all the gold” is fundamentally flawed – the translation of your plan is roughly “I’m going to code until a magical genie makes me rich.” The plan often requires a leap of faith that’s near insurmountable.
This sort of magical thinking gets startups into trouble all the time. Teams get captivated by ideas that seem compelling because they’re compelling if they work, and excitement causes them to flip the causation in their head: “If we can launch this new novel product, we’ll have a stranglehold on the market” becomes “we have to build this new product because it’ll give us a stranglehold on the market.” This causes them to embark on risky quests, because their zeal to have a goldmine overcomes their ability to comprehend reality.
A common place where this occurs is expansion into marketplace-oriented business models like an app marketplace or data clearinghouse. If you only look at the upsides, marketplace businesses look really compelling – viral, high margin, deep moats. What this ignores is that it’s just really hard to capture the serendipity that a marketplace requires – do both sides actually care about what you’re offering? Most consumer products rely on finding gold in the water as well, and there’s a reason that there are very few successful repeat founders in consumer, and hundreds of successful repeat founders in B2B.
But what does work is finding gold in the river (often because you were being really innovative solving some other problem), and immediately posting up with armed guards and starting an industrial mining operation. But you need to find the gold before you start mining, not the other way around. Some companies get very confused by this strategically – they see other startups mining gold, and don’t realize that they found the gold way before they set up the mine.
And that brings us full circle back to harvesting – once you’ve found the gold (typically a highly differentiated product offering), the best way to set up your mining operation is by doing a ton of harvesting. Build every compliance feature. Integrate with every SSO provider. Make every settings page beautiful and perfect. Don’t give anyone an excuse to use another product. That’s how you get the gold.