The Most Common Way Entrepreneurs Kill Their Business | Hacker News Reader

The Most Common Way Entrepreneurs Kill Their Business

nickoneill.com

71 pointsda5e12 comments

When Jeff Bezos creates a new division at Amazon he'll hire a product manager for the first 0-1 million in sales. When the division grows to 1 million, he fires them and brings on another person for the next 1-5 million stage of the company. He knows that some people shine in the early stages while others shine later.

I think it's OK to skip from one thing to the next if you build a team that will support and nurture what you've built before you leave.

Bill Gross has a helpful taxonomy that explains this stuff: http://masongentry.com/images/personality_types.jpg

Do you have a citation for the Bezos anecdote?

While I don't, this is very common for small-cap companies that are transitioning to mid-cap. So,it is not too much of a stretch to do this with divisions.

Here we go: http://youtu.be/Z4jH-hvxFUs?t=1h8m26s

My figures were off and he says "executive talent" not product managers, but my point about benchmarking stands. Sry, it had been a while since I watched it : )

I hadn't heard this before, but I'm fairly certain that Bezos would promote the PM rather than fire them. Otherwise who in their right mind would take the job?

Citation needed. That description doesn't match test career trajectory of most Amazonians. It doesn't even match on job title. If you said VP instead of product manager, your claim would be slightly more believable.

And 1 million what? Dollars? Units sold? The vast majority of Amazons divisions aren't even direct revenue drivers. Only the merchandising groups are.

Any group larger enough to be identifiable as a business unit measurable size is far too complex to have a "product manager" running it.

I'm curious as to where you heard this particular tidbit, as I currently work at Amazon in a relatively new division (and I'm not buying a word of what you've said).

Another common symptom of this behavior is expanding to multiple customers. As soon as the product/feature you're looking at developing doesn't serve the customer you're currently serving you're losing focus. It's great if you can identify a more profitable customer, but often I see teams chasing many different customers and not executing on serving any one of them especially well. s/customers/jobs a la Christensen and the same holds true.

The best ventures are those where the leaders are as good at saying 'no' as they are saying 'yes'.

Focus, yes. Also, listen.

If your customers are consistently saying, "this is nice, but what I really need is..." that's a massive sign that you should refocus your product to address their pain.

Maybe. You have to look at how many other customers agree on the "this is nice" and are paying for it, and how many of them would agree on the "what I really need is" and pay for that.

It's common for a basic product to satisfy many customers, who then all have slightly different needs for additional features. Taken to extreme, you end up with Microsoft Word.

On the other hand, you have Spolsky's claim that the #1 way they increase sales is by adding new features.

Finding the right balance is difficult, so it's easy to say that it's a common cause for loss of focus by entrepreneurs.

You're narrowing the focus too much. The article was not about software or tech businesses, it was much more general. I've seen the same problem described in businesses selling poultry rearing products and fashion jewellery.

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