Listen to this story here, or scroll down to read it.
Products exist to improve our lives. That should be their ultimate goal. Add value to our lives in some form. Unfortunately for VC (venture capital) backed startups, adding value to someone's life may come at a lower priority.
Did you hear the news about Medium yesterday? Long story short, they have made the hard decision of laying off 1/3 of their employees (50 of them) and they are changing up their business model as the existing one is not making enough revenue. That is where this story inspiration came up.
Just a month ago in my blog I asked the question, "Why do we always have to scale?". In the story, I challenge the reader to think about one of the benefits of running a small business. A small business exist for the customer. The end user and the employees come as the first priority.
Small business, to me, can also be defined as, "a predictable, stable business where product and culture are at their highest priority to put their customer first.". This is important to me. My mobile app development is user-first. Each decision that I make has the end user in mind with the highest priority. I care a lot about the end user of the product and I believe you should too.
Build something that improves the life of someone else so much they are willing to pay you money for it. - me
Back to Medium.
First off, I am not a founder of a VC backed company. I do not know all of the answers. I am not here to tell you to always pick small business over raising money and building a VC backed company. I have never been in the situation to decide between the two. Maybe some day I will raise VC money (I don't see it in the near future). I work with VC backed startup founders every day with my freelancing. I believe in building products to improve the lives of others and if you feel the same way, I want you to think about this idea.
VC backed companies have a different priority then a small business.
Their end goal is to make money for the founders and their share holders. A lot of money. 10x money or more. With a small business, your decisions are mostly made to add value to the end customer. Always working to build a loyal base of customers, continuously improving their experience, and bringing on more customers. As a VC backed company, you must think 10x. You could bring in 10 million dollars a year and still not be good enough.
Medium has built a product that has improved the lives of others. They have built a really awesome story telling platform. When new inspired writers come to me asking me how to start a blog, I tell them to start on Medium (...and then move over to Ghost.org if he/she happens to continue blogging consistently). It's a great product that has been growing month over month. But again, that's not good enough. So they must find a new business model, pivot, lay off some staff, regroup and start over.
When your priority is to build a 10x business, you have to make some hard decisions. Medium has built an awesome product that many love. That awesome product is in jeopardy each and every day because of their priority. Medium has done a great job building an ad-free social publication platform that users want. Individuals and companies alike host their publications on it and love it. It's a great user focused, value added product right now. Users should feel welcome to pay money for it because it's improving their lives. But, as of yesterday, that all may change. We may see the product suffer a little. We may see a complete pivot in the business model. We may see it shut down completely. We are not quite sure.
I hope the very best for Medium (and others such as Twitter and Discord to name just a couple). I think it's a great product. I love how it lowers the barrier for people to share their stories. Create account and write. We need more people to write to share their thoughts and feelings. Medium provides that to us.
This is one consequence of starting a VC backed company. I understand this is the way it must be, but at the same time, it's the sad truth. I wish it wasn't this way.
Oh, and thanks Ghost for being a small business. I love you guys and I trust sharing my stories with you more then anyone else around.
Thanks for reading.
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