ken mazaika

founder

[Book Review] Survival to Thrival — Building the Enterprise Startup

2019-05-06 ken mazaikabooks

Survival to Thrival packs a strong punch and provides a blueprint that the enterprise entrepreneur can use to roadmap a plan for a multi-year journey.

Despite the hokey title - there’s a lot of value to be found in this book’s pages.

Starting a company can feel like an exercise of forging a path through the wilderness. One wouldn’t use a chainsaw to forge a way through high brush or a machete to cut down a tree — but on the entrepreneurial path, when you’re holding a hammer, everything starts to look like nails.

Here’s how it is: this book doesn’t have all the answers. In fact, it has almost none of the answers, if you’re looking for that, my suggestion is to look elsewhere.

Rather, this book provides a framework of understanding what is the point of it? And at 126 pages, it’s a fairly light read that’s worth the time. The book isn’t really a game changer - but more of a rulebook and a basic strategy guide.

From a fairly simplified perspective - an enterprise startup can be on a journey to achieve one of the following four milestones:

  • Product-market fit
  • Go-to-market fit (distribution)
  • Category leadership
  • Industry leadership

Let’s get into what the key takeaways are for each of these milestones!

uss enterprise

Key takeaways:

Rule #1: Context is EVERYTHING! And everything is always changing… — Situations and context around building and running an enterprise startup are always changing. Things that work at one phase could be the exact opposite at another phase - don’t get complacent.

Building and scaling an enterprise startup is less about mastery of any particular skills, but more of a fluid exercise.

Rule #2: Understand the state of the business – the key here is to have a firm foundation on the why behind each of your whats that you find important.

A deep understanding of the current state of your business and laser focus on the objective you should be seeking for the current state of the business will take you much further than a dogmatic approach to anything.

Rule #3: Systems > Chaos — Running a business is a lot like building a go-kart when careening down a hill with duct-tape and WD-40 - but at some point, the go-kart needs to take flight and become a plane, too.

To do this - you will need to embrace the chaos - while bringing order to it all. The book is filled with examples where you need to pull from both ends of the spectrum. Things like using calculated reckless decision making and similar-seeming contradictions that make complete sense in the circumstance.

You need to embrace the chaos to have the components you need to organize and systematize things. And much like whack-a-mole, the order that is manufactured in one area will often scale and stress test other aspects of the business.

Things will break - and things will be fixed.

Building a company is much like an exercise of writing software: Red / Green / Refactor with regards to the problem:

  • Red — things are broken and need to be addressed immediately.
  • Green — things are working, but won’t scale reliably.
  • Refactor — things are organized, systematic and scalable. This area will no longer be a scalability issue, but since this is sorted out, scalability issues will creep up in other areas.

The key is applying this principle to the right areas, knowing where this will make a disproportionate impact and then generating as much leverage as possible.

Rule #4: Sometimes changing a mindset is more important than fixing a problem. The book outlines a variety of mindsets that are productive to have.

Here are the phases that I found most interesting to learn about…

Phase 1 — Product-market fit

Getting product-market fit is an exercise in obtaining paying reference customers for an enterprise startup. They will:

  • pay money
  • actively use the product
  • recommend you to others

Your goal is simple: obtain ~20 paying customers all while seeking out these paying reference customers.

Here’s why this is easier said than done:

Early sponsors within other companies need to believe in the product very strongly and put themselves on the line. They need to make the case:

I want to buy this new product from some new little company that you have never heard of and may not be around in 2-years.

These customers need to use the product in operational situations where business processes depend on it.

When customers recommend it to their peers - inbound customer interest accelerates. It will help lead you to the next phase (distribution).

Pro-tip: Investigate Adjacent Hotspots!

To get to 20 users, with paying reference customers, you may need to iterate on the product, hypothesis, and audience that you use.

If you make a 2x2 graph with customer/market on one axis and painpoint on another, you can map out:

  • target customer vs. adjacent customers
  • target pain point vs. adjacent pain points

Investigating one hotspot area can lead you to adjacent hotspots that prove easier to hit this 20 paying customer milestone.

Phase 2 – Go-to-market fit (aka. distribution)

The goal at this phase is to get a repeatable model and process to generate sales. The go-to market playbook is a comprehensive playbook that maps:

  • scalable marketing initiatives
  • scalable sales initiatives

Use Leslie’s Compass to determine a comprehensive strategy with regards to sales, marketing and product (high-touch vs. low-touch, expensive offering vs. cheap etc.)

When seeking out a GTM playbook, focus on one at a time during this phase.

It’s impossible to get repeatability when executing on more than one model at a time.

Don’t heavily scale marketing spend, or hire large (or expensive/experienced) salespeople as a search for GTM-fit. These need to happen after you find the fit.

Remember: The right VP of sales for your company will NOT author these playbooks from scratch — they finish and scale them. Don’t expect to hire someone and have them build this for you.

Use the metrics from your playbooks to come up with costs associated with finding a customer (customer acquisition cost). Get the sales model to be scalable, repeatable with a reasonable CAC and LTV and you have a system where you can put in a dollar and get out more than a dollar (they call it the go to GTM coefficient in the book).

When these numbers are balanced appropriately, stepping on the gas with sales and marketing makes sense. This brings you to the next phase the company lifecycle GTM acceleration - which leads to rapid company growth.

Phase 3 — Category leadership

At this phase investing in your GTM playbooks, you can grow reliably and predictably. This requires serious shifts in mindset.

Recruiting, hiring & onboarding become core to the mission at this point. To get good talent, you should have answers to the question:

“Why would you want to work here?”

Pro-tip: consider having a new hire bootcamp so you can scale company culture. Interviewing for culture-fit becomes increasingly important as scaling the team at this phase.

Investors are going to have questions around three areas of your business:

  • Growth - how fast are you growing and how big is the market?
  • Competition - why do you beat the competition and is your position defensible?
  • Economics — does your playbook have decent economics and is a path to break-even/profitability even possible?

Dashboard metrics become critical to find problems and fix them before they become catastrophes. Suggested dashboards include:

  • Quarter sales
  • Expense forecasts
  • Cash burn
  • Cash balance
  • Sales forecast and pipeline

Investments in your GTM playbook should ensure you lock down the leadership in the category of offering you are providing.

Phase 4 — Industry leadership

This phase requires two competing objectives and is very difficult to get right.

Objective #1 — transcend the initial category of offering to lead the industry instead of just leading a specific product category.

Objective #2 — build a sustainable (profitable) company to ensure you can continue to grow and scale.

There are seven strategies to transcend the initial category - and most companies will need to do all of them.

  1. Expand market from initial market niche to broader horizontals or multiple verticals.
  2. Deepen $-per-customer through expansion selling or the upselling of adjacent solutions.
  3. Augment GTM playbook by adding multiple sales models.
  4. Strengthen leadership by bringing on new talent.
  5. Replatform to bridge customers through product generation changes.
  6. Generate platform gravity where customers are able to build an ecosystem that had capabilities that depend on the platform.
  7. Shift mindset to prevent getting stuck in the initial category.

Transcending a category while simultaneously having a clear and profitable path to growth is challenging, but not impossible.

At this phase, an IPO provides a new beginning for a company - but it’s not an exit. Another way to think about it is like a Series A where the investors change, meanwhile having a marketing event, the IPO, which is able to bolster the company’s credibility.

At this phase, operational excellence becomes important. It requires:

  • disciplined growth
  • a path to profitability

Within your company, a split may arise between growers and optimizers. Remember that both roles are critical at this phase: those who seek to do things right and get the excellence and those that grow the company. Catering to both is hard, but it’s important.



I found the book to be refreshing. It helps to provide context around what, and more importantly when to do something.

Take the question for example:

Should you seek to expand outside your original vertical to achieve growth?

Rather than a yes or no answer, the when context becomes important. For a business that doesn’t have a repeatable, scalable go-to-market plan for its original business - it’s probably unwise. On the flip-side, for a company that does have a scalable go-to-market plan and has squeezed that orange to it’s potential - it could be a wise move to transcend the category.

This book is a good reminder that shooting for 20 paying reference customers at a $5,000/month pricepoint builds a company with a $1.2M ARR. This is something that is hard - but not impossible.

Achieve this objective and you’re ready for the next phase of growth (and potentially future rounds of capital).