Company-Building: Exponential By Choice

"Common sense is nothing more than a deposit of prejudices 
laid down in the mind before you reach eighteen."
— Albert Einstein

Exponential thinking is an internal mental process that challenges and expands the realm of what is presently possible for yourself and others. This mode of operation empowers top founders and their executive teams to achieve their goals with greater speed and scale— within specific constraints such as limited capital, human resources, and time. Furthermore, it enables startup teams to create and scale a strongly differentiated value proposition without falling victim to past results, incremental practices, and what is considered 'safe' and 'comfortable.' For example, founders we work with have used exponential thinking in a variety of ways to:

  • Discover new GTM motions to go from 0 to 300MM TPV in a year and only two new hires.

  • Create an MVP of a differentiated product within a week.

  • Increase speed of output due to the new workflows that a globally distributed workforce enables.

  • Raise 100MM+ in new VC funding during a challenging economic environment.

The list goes on. 

(Note: Exponential thinking is also referred to as 10X' thinking or 'Step-Function' thinking.) 

Exponential thinking is especially useful for creating outcomes with limited precedence. E.g., a reusable rocket, smartphone cameras that can detect skin cancer, morphic telescope lenses, securing a new job without prior experience or relevant academic training. However, exponential thinking can be just as beneficial as an 'operating philosophy' for company-building. 

Many services and products we benefit from today result from exponential thinking at their inception. Think of any product or service you absolutely love and can't imagine your life without— now think about what your alternative would be if that product or service disappeared. 

  • Superhuman email o/s?

  • Building elevators?

  • Grammarly?

  • Airplanes?

  • Contact lenses?

In this post, we will deconstruct exponential thinking into practical, incremental exercises so you and your core teams can:

  • Accelerate goal attainment while decreasing operational burden.

  • Achieve outcomes with limiting resources and/or other constraints (functional scrappiness).

  • Dissolve roadblocks at speed.

  • Increase personal effectiveness at work.

We have applied exponential thinking in our lives, but perhaps not as intentionally as we would have liked. Over this foundational short course, we will unpack the fundamental skill sets required to apply exponential thinking intentionally and habitually. 

As described earlier in this blog post, exponential thinking is an internal mental process. Therefore we will be taking an intimate journey together to unpack and explore your automated decision-making strategies so you can gain the power to challenge and change them by choice.

1: Between 'Common Sense' and Action

"The meaning we make about anything governs our decision-making."

A founder was struggling with making decisions about his capital strategy during the recent market downturn:

  • Take an inside round, buy the team time to gain more traction, and deal with more dilution than desired.

  • Try to raise an institutional round but confront the real risk that no one might invest.

It never occurred to that founder to do both. In this example, the decision-making limitation was based on a simple equation: Option 1 OR Option 2. It never occurred that both options could be combined to create Option 3.

Another founder reverse-engineered his 12-month fundraising milestones and realized he would need to:

  • Secure hundreds of small business practices to have a shot.

  • Build an increasingly large sales team which would also erode his margins.

Following this train of thought, he would need to ramp up a nearly non-existent sales team to cold-call, sell his product to small business owners at scale and ensure they do not churn— this didn't look like a good path to go down. 

Instead, he asked a different question and got a new answer— a GTM motion that could capture hundreds of accounts by engaging a single stakeholder. TLDR: he was ready to raise capital within 6-months. In this example, the decision-making process he used was to switch the frame from:

"I must engage 100's of practices to achieve $ within 12 months…" 

→ 

"To achieve Y faster and cheaper, what else can I do?"

The above examples illustrate simple assumptions that happen at the speed of thought and govern the quality of our decision-making.

Making assumptions is important and is a natural part of being human because the human brain is an association, meaning-making machine. We make meaning every day about everything— for better or worse. Most of the time, this is a feature less so a bug because it helps us with simple things such as:

  • Knowing what a genuine smile means without having to think about it.

  • Knowing a red light means you shouldn't cross the road.

  • Avoid touching a glowing red stove with our hands.

The examples above allow us to perform many functions automatically without a conscious computational burden. However, this feature can become a bug when it comes to company-building, especially at early/early-stage startups where the advantage is:

  • Seeing an opportunity that others don't.

  • Securing that opportunity with speed and nimbleness.

  • Capitalizing on opportunities liberated by shock events.

The meaning we make about our sensory observations— what we perceive using our five senses: visual (seeing), auditory (hearing), kinesthetic (feeling), olfactory (smelling), and gustatory (tasting) — governs our experience of a situation and how we respond. These meanings we assign also pass us by at the speed of thought. Unless we consciously take a breath, reflect on our internal thoughts, and analyze them. 

Therefore, we need a structured way to evaluate our meaning-making (internal thoughts) to identify the biases and filters we place on any situation or decision we are confronted with. When developing awareness about our personal bias, meanings, and filters in life, it is helpful to make the distinction between two types of information:

  1. Sensory Information: Information your brain collects from your five senses (visual, auditory, kinesthetic, olfactory, gustatory), giving you information about the world around you. For example, you might see green trees, hear birds singing, feel the cool breeze on your skin, smell morning dew, and taste the coffee you drink during breakfast.

    Sensory-based descriptions are typically behaviorally specific— you can take what is written and film a movie scene without needing to fill in too many details. For example, "Joe just walked into the meeting 10-minutes after it had commenced and asked (vocalized) that he be caught up on anything he missed." We can confirm Joe's behavior with our five senses if we are in the room. 

  2. Non-Sensory Information: Non-sensory Information is the information we can't confirm with our five senses. For example:

    • Charles isn't happy.

    • My boss, Mary, doesn't care.

    Charles: you might see (visual channel) Charles hunch his shoulders, avoid eye contact and attach the meaning that Charles isn't engaged. However, Charles might be thinking things over and needs time to process before responding.

    Mary: walks past you daily and never says hello to you aloud (auditory channel), and you take that to mean she doesn't care about you. However, Mary might care about you as she focuses on building the business to ensure she has the resources to support you.

Exercise: Shift Your Perception By Choice

Identify any evaluation or decision you made at work about what should be done, what can be done, or what can't be done, for example— 

  • What sensory information did you use to make the evaluation/decision?

  • What non-sensory Information did you use to make the evaluation/decision?

Write them down. Regarding the non-sensory Information (meaning) you used, ask yourself the following questions:

  • How appropriate is the non-sensory Information (meaning/assumption/belief) for the task? For example, it is appropriate to assume capital is harder to come by during an economic recession versus an economic bull-run— but not impossible. It might be less appropriate to assume that nobody invests in startups during an economic recession.

  • What other meanings could someone (other than myself) make about this situation?

    • "What else could be assumed?"

    • "What else might be true?"

  • How can I disprove the meaning I am making?

  • What new information/awareness is available to me now?

Practicing this process a few times a day for the next 30 days can help you strengthen your awareness and identify exponential opportunities which might otherwise go unnoticed. 

2: Leverage New Ways of Thought

As you develop an awareness of the meaning you make day-to-day— you will identify the limits of your world view, the richness others' world views can provide, and, more importantly, the opportunities to extend what you perceive. However, it is unrealistic to expect you to analyze every situation you encounter at work with the sensory/non-sensory exercises prescribed— that is unproductive computational overload. 

In this section, we cover the typical situations you might encounter while company-building— and a questioning framework you can use with yourself and others to:

  • Move faster towards a common goal.

  • Expand the possibilities of how one can achieve a call or respond to anything.

  • Uncover the assumptions that drive certain patterns of decision-making.

Exercise: Shoot for Outcomes, Not Just Getting Stuff Done

Top Founder CEOs often struggle with getting leadership teams to focus on achieving outcomes/goals versus just' getting stuff done.' While disciplined execution is necessary, it can become a trap because people will default to what has proven to work for them in the past. 

It is important to free your leadership team's mind from past habits - what they think they 'should do' or 'can do' - to focus on the great outcomes they want to achieve. Many talented people surprise themselves by achieving things they never thought possible. As they say, shoot for the stars, and you might land on the moon. Here is a sequence of questions you can use to train their thinking:

  • If you could wave a magic wand, what outcome would you like to see come true?

  • How will you know when you have achieved that outcome? (real-world evidence)

  • What evidence, if any, suggests that the outcome is unachievable?

  • What assumptions (meaning) underpin that evaluation?

  • What would someone have to assume for that outcome to be achievable?

Exercise: Capitalize on Disagreement

Disagreement can be a healthy step-function accelerant for all businesses if perceived as an opportunity to capitalize on diverse points of view, methods, and skills. However, when two parties or more disagree, it can be easy to assume everyone knows what they are disagreeing about. To unpack the issue and understand the assumptions that are driving people's stances and opinions, you can run this process:

  • What specifically is the goal here?

    • Are we in disagreement about the goal?

    • Are we in disagreement about the means to achieve the goal?

  • What specifically lets you know their proposal is wrong and your proposal is correct?

    • What sensory information am I making to arrive at this evaluation?

    • What meaning (non-sensory) am I making to arrive at this evaluation?

  • What if you're both wrong?

    • What else might be possible?

  • What if you're both right?

    • What else might be possible?

Repeat the process several times. It's not about getting the perfect answers— it's about repeating the process sufficiently, so your brain learns to automatically do it without conscious effort. Repetition forces the brain to generalize a process so that people develop unconscious competence with some time.

Exercise: Dissolve Roadblocks

When people encounter roadblocks on the road, most people will automatically reroute themselves down another road, street, or pathway to get to their destination on time. The same can be applied to roadblocks toward a specific outcome or goal. Run this loop several times when you or a team encounter a roadblock:

  • State the outcome/destination.

  • Describe the roadblock.

Now ask yourself: 

  • What else can I do?

    • What sensory information am I making to arrive at this decision?

    • What meaning (non-sensory) am I making to arrive at this decision?

  • How else can I get to the outcome?

    • What sensory information am I making to arrive at this decision?

    • What meaning (non-sensory) am I making to arrive at this decision?

Repeat the process several times.

Exercise: Have Your Cake and Eat it Too

Zero-sum thinking is a common mode of thought where people operate under the assumption a variable has to be lowered for another variable to ascend. It shows up in many ways, for example:

  • I can move faster, but the quality will be sacrificed.

  • I can achieve a bigger goal, but it'll cost more money.

  • A distributed workforce is cheaper but negatively impacts workflows and productivity.

The simplest way to shift the zero-sum thinking here is to ask:

  • How can you have both? Example:

    • Speed and quality.

    • Great outcomes and low cost.

    • A distributed workforce that is highly efficient and productive.

Then ask:

  • What might you/we have to do differently to make that possible?

  • What assumption (if any) might have to be disproved or discarded to make that possible?

You can have your cake and eat it too.

3: Recommended Resources