I spent time walking with a founder friend. One of the things we talked about were two paths to success that we’ve seen be successful. One was high activity spread across many paths, and the other was low activity focused on a single or limited number of paths.

The high-activity path is a hustler’s path. Hustlers are constantly working on a variety of things and doing lots of activities. This approach is highly iterative and reactive. There isn’t much deep reflection or many predefined goals at the outset. It’s more go where things take you. These folks are constantly evaluating what new paths to take based on the results of the last activity. They repeat the cycle until it ends (hopefully) in whatever the hustler defines as success.

The low-activity path is strategic. Strategists spend time deciding on a destination on the front end. Activities that align with the goal are taken on; those that don’t (even if promising) are declined. They reflect along the way to determine if the things they’re doing are having the desired results. They continually dissect failures and adjust. This approach focuses on a goal and tries to determine the best path to it.

We concluded that success can be achieved in various ways. These are just two we’ve seen up close that resulted in outsize success. In each instance, the person’s personality fit their approach. The extroverted and high-activity person we knew took the hustler’s path. The deep-thinking and reserved person took the strategic path.

A fellow investor told me about one of his better-performing portfolio companies. It’s executing well, hiring amazing people, and seeing a path for scaling if things go well. One area of uncertainty right now is the customer relationship. The company generates revenue by performing work on behalf of other companies. Translation: it doesn’t know or own the customer. The other company has a direct relationship with the customer. This investor believes that to unlock exponential growth, this portfolio company must develop a strategy to own the customer relationship.

Acquiring a direct customer can be hard and expensive for start-ups in some industries. Partnering with a larger company that has an established customer base and can funnel those customers to you is attractive in the early stages of going from zero to one. The cost to acquire them is usually low (if not zero), and the customers can be plentiful if you solve a pain point.

However, this usually isn’t a reliable long-term strategy. It can have lots of downsides. A major one is lack of feedback. You need feedback to make your product better, which you must do to achieve product–market fit—but it’s difficult to get feedback from customers you don’t know. Most companies don’t provide you with their customer contact information (email address or phone number), so it’s hard to reach out after the transaction is completed. You never really know what the customer loves or hates about your solution.

Another downside is concentration. You’re at the mercy of someone else to acquire customers, and they can make a change that severely and negatively affects your business without warning. You could see your business evaporate overnight and not be able to do anything about it. Conversely, if you’re ready to scale, the bigger company can limit your growth if it chooses to not play nice.

Customer relationships are key, and there should be a plan to have direct relationships. It’s OK to have partnerships and other go-to-market strategies, but the core strategy should be a direct relationship.

I listened to a podcast today. It was about start-ups. One of the guests said something that stuck with me: there are no secrets in the world anymore (I’m paraphrasing). Everything is in the public domain. The question is how you find what to pay attention to.

Twitter, Facebook, YouTube, and other platforms distribute information in ways we haven’t seen historically. It’s done quickly and isn’t filtered by larger media organizations. And they empower people to share knowledge with a click or tap. The upshot? A flood of information accessible to anyone. Some has substance, and some doesn’t. It’s become harder to know what information should be taken seriously.

Access to information is important, and historically, most people haven’t had much of it. Knowledge is power, and I’m a fan of more people having it so they can make better-informed decisions. How you determine what you should and shouldn’t pay attention to is important. It’s something we’ll have to solve for in this new world of more accessible information. The solution could have major implications for how we learn and absorb information. It’s a large opportunity, and I can’t wait to see how entrepreneurs solve for this problem at scale across various platforms.  

‍

Today Apple officially announced its Tap to Pay product, which will allow merchants to accept payment simply by tapping their iPhones. I read this was in the works and shared it a few weeks back. Today’s announcement contains more details, including that Stripe will be the first platform to offer this product to its customers, including Shopify’s app, Point of Sale.

I’ve thought for some time that Apple could become a consumer bank. Apple already has a distribution network deployed to consumers via iPhones and has been adding financial products steadily over the last few years. As I think about this more, I believe it has a broader vision. Apple will become the bank for consumers and small to midsize businesses. It’s a massive market in a less-than-cutting-edge industry. This strategy will create a bigger moat around the iPhone and other hardware products while growing a new line of business. It’s ambitious and ingenious. Can’t way to see what other products Apple releases to support this strategy.

‍

I’ve shared my views on the digitization of distribution and its impact on banking. Today I read about Apple’s new service that will allow small businesses to accept payments on their iPhones. No hardware (i.e., payment terminal) will be required. Consumers will be able to tap a credit card or another iPhone against the business’s iPhone to send payment. The service hasn’t been launched as of today, but it’s coming, and it shows how Apple is inching closer to being a bank.

Helping consumers and small businesses with financial services is an enormous market—one of the few that could move the needle for a company the size of Apple. Banking is about to go through rapid change. Don’t be surprised if Apple ends up being the go-to bank for consumers and small businesses.

Today I had the opportunity to participate in an event whose purpose was to give early founders candid feedback on their businesses. The founders got real-time as well as written feedback and rankings in core areas, such as vision, execution, and storytelling.

These founders have small teams, so they’re still involved in the day-to-day combat of building a company. But they spent most of today away from operations to focus on their businesses at a high level. We went over everything from go-to-market strategy to vision to hiring plans.

It was great helping these founder consider things from this perspective, and I think it was much needed by some of them. Today was a reminder of how important it is to get out of the weeds of running the business. Early founders can find themselves on a hamster wheel if they work in the business too much. They must be intentional about making time to regularly work on the business from a high level. I know this because I learned it the hard way when I was a founder.  

I’m excited for these founders and can’t wait to see what the future holds for them!

I’ve been chatting with a founder friend about a deal he’s considering doing. The seller doesn’t have any other suitors, probably because they’re asking for above-market pricing. My friend knows this and has been trying to get them to a price more aligned with the current market. All the numbers support my friend’s argument.

Today we spoke again, and he told me he’s going to try to meet them in the middle. He’ll likely end up paying more than the deal is currently worth. Not expecting this, I questioned his logic. His explanation: he’s focused on future, not current, value. He has a vision for creating more value using the asset. If he executes on it, the difference between what the deal is worth now and what he paid will be negligible. He sees a great opportunity to create a large amount of value and wants to capitalize on it quickly before someone else sees it.

Recognizing greatness is important to any founder’s success. I didn’t do it early in my journey, and it hurt me. When this founder began focusing on how great this opportunity is, it changed his thought processes, actions, and sense of urgency. I’m looking forward to seeing him create something profitable and great out of this opportunity!

I spent time reading an interview of a tech CEO today. He discussed his market and why he’s excited about his company’s growth prospects. Each of the largest players in his industry has no more than 4% market share, yet a few of them do over $100 billion in annual revenue each. It’s a massive market. Large businesses can be built serving a small fraction of it. It’s certainly not a winner-take-all market: there will be multiple winners. This CEO thinks his company can grow rapidly for many years to come without owning a significant percentage of the market.

Market size is something early founders should consider. The size of the market (along with other factors) can have a big impact on the company’s ability to achieve sustained rapid growth. Big or rapidly growing markets are great for building high-growth companies. Small or declining markets usually make sustainable high growth much more difficult.

Acquiring paying customers is a challenge for most companies and especially for early-stage companies. The brand isn’t well known, and resources don’t allow them do marketing the way they want. Customers that early companies do acquire are precious.

A few weeks ago, I chatted with two smart founders who have an interesting software product. Their platform helps consumers resolve a particular issue efficiently. The issue is something most people will experience only once in their lifetime, if ever. The downside to not resolving the issue is high, so the software creates value for consumers. Once the issue is resolved for a customer, though, they become an ex-customer and no longer contribute to revenue. This creates a challenge: the founders must constantly attract new customers. Their high marketing spend reflects this. This company will likely be successful, but it will be harder to scale than, say, a company that attracts and retains customers who pay monthly for many years.

Acquisition and retention of customers are important issues for founders to think about. Not all business models support ongoing customer payments for years, and that’s okay. Whatever business model a founder chooses, though, they should have a strategy to acquire customers in a cost-effective way and, if possible with that model, retain them.

I was getting an investor’s perspective, and he said something that resonated with me. He’s a big fan of taking risks and trying things. Planting seeds, he calls it. He never knows whether the seeds he plants will germinate or, if they do, what they’ll become. One may grow into something massive. He’s lived this way, and it’s worked out well.

I agree, to a point. It’s important to try new things. If you don’t, the chances of having an outsize outcome are minimal. As Wayne Gretzky said, “You miss 100% of the shots you don't take.” On the other hand, I think trying to do many things at once isn’t ideal for most of us. You can spread yourself so thin that the thing that could be a winner doesn’t work because it isn’t getting enough attention.

My approach? Try new things in hopes that one will grow to be something big—and give each one the sun, soil, and space it needs to germinate and thrive.