Kindle vs. Fire Strategies

In his recent article The Kindle and the Fire, Eventbrite’s CPO Casey Winters explains how he thinks about growth. He argues that most founders and marketing teams miss to adapt their growth activities to the stage of the company.

Thereby Casey discerns between two types of growth strategies:

1. non-scalable strategies to get scale and (kindle strategies)
2. scalable strategies (fire strategies)

Kindle Strategies → start a fire

The main objective here is to get the company to a stage where sustainable practices are actually possible. In the extreme cases (and if the war chests are full), companies like Postmate run aggressive paid search and promotion ads where they deliberately loose money in order to get both sides of a marketplace to a sustainable network effect. At this stage the customer life time value (LTV) only plays a small role. He also illustrates this strategy with the example of Superhuman (the subscription email client). They do live calls or live meetings with almost any new person who signs up. This approach is obviously not scalable, but they do it until their LTV increases or they improve their self-serve on-boarding. This is not a new idea, Paul Graham's "do things that don't scale" has made waves as far back as 2013 all through the Silicon Valley and beyond. This strategy is NOT SUPPOSED to be sustainable and efficient, its supposed to be quick.

Fire Strategies → keep the fire burning

On the contrary, fire strategies NEED TO be sustainable. They are responsible for building a long-term profitable business. Casey suggests that before we think about what kindle strategy we choose, we need to think hard what kind of fire strategy we actually want our business to grow by over the longterm. He writes:

There aren’t that many fire strategies. Those that involve network effects are generally the best. Sales, paid acquisition, virality, and user generated content with a scalable distribution channel are the most common ways to create sustainable loops to either scale a network effect or scale a product that doesn’t have network effects. There just aren’t that many ways to scale, and almost all involve having extremely good retention as well. Otherwise, you won’t have the profit in the system to invest in sales or paid acquisition, or you won’t get enough users to invite or create content to attract more users.

Now it's not always an either or, the two strategies can also work in tandem. Take SEO for example. While part of the marketing team is working on creating and ranking content over the long-term, unscalable kindle strategies can be applied in order to show quicker growth and to keep above water and then sequence them into scalable strategies. The key takeaway from this article is to recognize that both strategies have to be applied in context by the stage of the company or project you are trying to grow.

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