Taking Leaps & Non-Linear Scaling
At last year’s Sequoia Base Camp, the theme was about operating in expert mode. At different stages of development, expert mode means different things. At the start, Paul Graham would ask founders “to do things that don’t scale” because it is a very effective way to experiment and learn. When you find repeatability in your product or go-to-market, you want to start scaling. Scaling can take you very far, but scaling hits natural limits eventually. While linear scaling and incremental improvements prevent plateauing, they also lead to declining growth rates. Hence, it is so hard to keep growing.
One way to consistently compound growth is to take leaps and find ways to scale non-linearly. However, taking leaps is hard while scaling because we have something to lose: our current scaling business. At the same time, if we don’t take leaps, those who are will surpass us, no matter how well we operate our scaling business.
Amazon scaled books and had to leap to other categories again and again. Before they were known as the Everything Store, they also took leaps to Prime, AWS, Video, Studio, and more. SpaceX leaped to compete with governments to launch payloads and people into space. Before SpaceX became a market leader in the launch business, they leaped to connect the world with Starlink. Every new product release in the semiconductor industry is a leap, but NVIDIA’s focus and leap into AI helped propel the company into a $2 trillion market cap.
Leaps come in different forms and sizes, from adjacent product extensions or category expansions to launches of new products and services to building entirely new businesses. Some of these leaps are so divergent from the current company that we could call them refounding moments. If we want to build enduring businesses, we not only have to keep building and scaling our current business, but we also have to make leaps again and again into the future.
Pursue the extraordinary, dare to leap, and unleash the power of non-linear scaling. This is the path to be legendary.