Joel Spolsky: “Strategy Letter I: Ben and Jerry’s vs. Amazon”

By Joel Spolsky (@spolsky), Founder of Fog Creek, Trello, Stack Overflow, and Glitch.

Joel Spolsky NFX

 

This essay is part of The Founder List by NFX, audible essays from the most prolific leaders in technology, selected by the Founder community.

 

Text Version

Building a company? You’ve got one very important decision to make, because it affects everything else you do. No matter what else you do, you absolutely must figure out which camp you’re in, and gear everything you do accordingly, or you’re going to have a disaster on your hands.

The decision? Whether to grow slowly, organically, and profitably, or whether to have a big bang with very fast growth and lots of capital.

The organic model is to start small, with limited goals, and slowly build a business over a long period of time. I’m going to call this the Ben and Jerry’s model, because Ben and Jerry’s fits this model pretty well.

The other model, popularly called “Get Big Fast” (a.k.a. “Land Grab”), requires you to raise a lot of capital, and work as quickly as possible to get big fast without concern for profitability. I’m going to call this the Amazon model, because Jeff Bezos, the founder of Amazon, has practically become the celebrity spokesmodel for Get Big Fast.

Let’s look at some of the differences between these models. The first thing to ask is: are you going into a business that has competition, or not?

You can read the full essay here.

 

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