The more you want to grow, the harder it is to grow

Regarding the issue of growth, there is a vicious circle that many people, including me, have encountered, which is: the more you want growth, the harder it is to grow - the more you pursue more growth and force yourself to do so, the more you find that you are slowly entering a growth bottleneck.

This bottleneck forces us to continue to pursue growth and do more things that are far from user value, thus falling into a vicious cycle. This article attempts to study this vicious circle and the mentality behind it from another perspective, and I believe it will be valuable to you.

When it comes to the topic of growth, one of the most common perspectives we think about is how to optimize efficiency, capture traffic, and achieve growth. A classic AAARR model can well explain this way of thinking.

Countless companies I have encountered in recent years are immersed in this idea, raising funds, acquiring users, monetizing revenue, refinancing, and then constantly finding various ways to improve efficiency and capture more traffic.

But over time, many people experience a sense of powerlessness and fatigue - they feel like they are running madly while being whipped.

It is difficult to achieve greater success despite such an all-out effort. We are still constantly developing products, researching traffic, optimizing the organization, and improving capabilities, but it is difficult to make breakthroughs and we have been lingering in the same place.

At this point, you may feel like you’ve reached a growth plateau.

A typical phenomenon of reaching a growth bottleneck is that the more you want growth, the further away you are from the desired growth.

For example, a food brand on Taobao, after taking advantage of the rising momentum, if it wants to maintain growth, it has to continue to expand its product categories and rely on new products to drive new traffic.

As a result, the production and sales scale of each raw material is very low, which cannot form economies of scale and thus cannot bring users a value-added experience. The scale has increased but the trust of users has gradually been lost. Moreover, this also requires the company to frequently set up numerous project teams and adopt various different work processes. The management complexity is increasing day by day, and even makes the founders begin to doubt their own management capabilities.

But there is no way, I must grow. Only growth can maintain potential energy. I have to grit my teeth and hold on. Maybe I can get through it. But the result is often the opposite, falling into a vicious cycle.

If I were to describe this phenomenon in one sentence, it would be that we are kidnapped by the things we want to have.

We all know that the most important way to grow is to innovate ahead of others in major trends, to create excess value and win reputation from the user's perspective, and to continuously accumulate and improve ourselves.

But when a person is kidnapped by the expectation of growth, he will lose these habits. He will become speculative and follow his opponents instead of doing groundbreaking things. He will calculate his own pros and cons every day instead of paying attention to users. He will grab the resources and traffic around him instead of accumulating value. All these will make him further away from growth.

A further vicious cycle is that people think the cause of these problems is that they are not aggressive enough and not hardworking enough, so they continue to exploit and force themselves, making themselves live in a state of anxiety, tension and fear of loss (the industry often calls it the FOMO mentality).

It makes it harder for you to do the things you love and to focus, which further loses your advantage.

This is the most common vicious circle encountered in growth. To be honest, I have been deeply tortured by it and kept thinking about how to break it. I found that the only way to break growth anxiety is to switch from the perspective of pursuing growth to the perspective of value creation.

My teacher Professor Ning Xiangdong once recommended me a classic TV series "The Yongzheng Dynasty". The plot of the nine princes competing for the throne is very inspiring.

During the battle for the throne among the nine princes during the reign of Emperor Kangxi, the Crown Prince and the Eighth Prince were caught in a vicious circle. They wanted to win the throne very much and tried their best to do so.

In order to fight for the throne, they colluded with more and more ministers, constantly attacked other competing princes, and in order to avoid failure, they dared not accept difficult tasks (such as recovering debts owed to the national treasury, which was thankless and had huge political risks).

But in the end, this behavior of fighting for the throne made them lose their most valuable asset - the trust of the emperor, and thus made them further away from the throne.

On the contrary, Si Ye’s strategic advisor Wu Sidao (who is said to be possessed by the screenwriter) proposed a key strategy that goes against the consensus but is truly effective. It can be summed up in eight words: “To fight is not to fight, and not to fight is to fight.”

When you try to fight for power, you will be further away from the throne. When you don't fight and think about how to create value for the Qing Dynasty, you can win the emperor's trust. This is the biggest fight and you will become the final winner.

When the Fourth Master looked at the competition for the throne from this different perspective, he naturally showed many unusual behaviors (such as taking on thankless tasks on his own initiative, and not taking advantage of the Second Prince's misfortune at critical moments), which helped him win the throne in the end.

Of course, this is somewhat different from historical facts, but it gave me a lot of inspiration. Sometimes adjusting the perspective can bring about huge changes. The most distinctive strategy of the Fourth Master is to change from a perspective of competition to a perspective of contribution.

Similarly, faced with growth anxiety and the dilemma of long-term growth (short-term growth is very easy, you just need to do the math, but sustained long-term growth is really, really difficult), we can only break the impasse by adjusting our perspective - I have always believed that changing the way we look at problems, rather than solving the problem itself, is often the most critical solution.

The most difficult transformation here is how to change from a perspective of pursuing growth to a perspective of value creation, and from "how do I get growth" to "how do I become a person who deserves to be rewarded for growth."

Only by adopting such a perspective can we do things that are truly conducive to long-term growth - such as doing groundbreaking things in the face of huge trends; such as focusing on users and providing excess value; such as accumulating over the long term.

Otherwise, no matter how many methods you find or how many times you call for long-termism, it will be useless. After all, the problem lies in the "heart" rather than the brain.

So how do you switch this perspective?

I once participated in an event at Zeng Ming Academy, and Professor Zeng Ming had a point that gave me great inspiration, which is that the most important thing in current strategy is how to face the future and the users.

Compared with most companies and individuals, the actual starting point is oriented towards the past, themselves, and resources, and behind this is a "competitive perspective."

To truly get rid of this perspective, the most difficult thing is not the methodology, but three kinds of "courage":

1. the courage to look to the future rather than to the past;
2. The courage to focus on the user rather than calculating pros and cons;
3. The courage to accumulate value rather than grab resources.

1. The courage to look to the future rather than the past

I have always been curious about one question: what exactly makes some originally pioneering founders become conservative and complacent, thus falling into a growth bottleneck.

Some time ago, I talked to the founder of a consumer goods company that had reached a certain scale but was suffering from growth anxiety. He was very busy every day, busy with securing more channels, busy with establishing more joint collaborations, and busy with looking for cheap traffic one after another.

But when I asked, "What is the most important opportunity in your industry in the next three years?", he was suddenly stunned.

Yes, when I started my business a few years ago, I had a clear understanding of this issue. However, after reaching a certain scale, I began to lose my perception of future opportunities and insight into industry changes. Driven by capital, I began to frantically pursue scale.

So what exactly causes some pioneering people to begin to get stuck in a bottleneck?

I have taken some mind, body and spirit courses in the past period of time, and I found an important point in them, which is "how you understand your past determines how you deal with the future."

I have participated in some company review meetings. One of the most important parts is to review the past development of the entire company and use it to inspire the future. I found that most of the time, the meeting is essentially asking this question: What did you insist on in the past that allowed you to have what you have today (the implicit assumption is that continuing to insist on these will create a greater tomorrow)?

We will then summarize a lot of methodologies, experiences, and values. There is nothing wrong with this in itself, and to be honest it is very rewarding. But then we will decide what to do and what not to do next based on these summarized histories, and this often leads to self-limitation.

I remember reading the Kodak case when I was a first-year graduate student. I clearly remember that Kodak believed that the key to its success was its insistence on imaging quality and performance (this belief also, to a certain extent, limited their entry into the digital camera market, which was more convenient but had relatively low imaging quality).

But this attribution is not true. Kodak's initial success was due to the fact that its founder George Eastman developed a low-priced, convenient but relatively low-performance camera that was available to everyone, turning the camera from a tool for professionals into a mass product for the first time.

Its initial secret to success was not high quality, but rather grasping technological trends to develop convenient products suitable for more people.

What if we ask another question in addition to the above questions during the review meeting? "What opportunities did you seize, break, or create in the past that led to where you are today?"

You will find that the perspective is completely different.

I believe that almost every company and individual that has ever achieved success has made more or less groundbreaking moves to seize a trend and break the convention.

But many people and companies forget this point once they achieve success, mistakenly believing that they have achieved success by performing the same routine actions day after day, and expect that as long as they continue to repeat these actions, improve their efficiency and correct their shortcomings, success will come as expected again.

When success does not come as expected, you will further wonder if you are not harsh enough on yourself, that you still have too many shortcomings, or that you are not persistent enough in your previous values ​​and practices. Then you will enter a cycle of following the old ways and imposing more and more restrictions on yourself.

Looking back, it is not wrong for us to think about "what we have insisted on that has brought us to where we are today", but we often overlook another perspective, that is, truly huge growth must come from the promotion of huge potential energy, and from our taking some meaningful and pioneering actions under such potential energy.

Take the consumer goods industry as an example. Almost without exception, successful large companies in history have become friends with the most important potential at the time and have been the first to seize huge trends through groundbreaking actions - new user groups and markets, new channels and media, new technologies, and so on.

For example, LV took the lead in developing lightweight and wear-resistant suitcases, seizing the opportunity of the popularization of trains in Europe in the 19th century; NIKE seized the opportunity of the rise of television broadcasting by sponsoring top stars; Sony seized the breakthrough in transistor technology to develop the Walkman, and so on.

Even the continued growth of some companies later came from seizing new trends and opportunities (for example, LV later grew into a large group, thanks to being the first to seize the huge trend of globalization and open directly-operated stores around the world).

This truth is so simple, yet so widely ignored. When we enter a perspective of pursuing growth rather than value creation, we will especially want to continue the past high-speed growth, and thus we will develop such a belief:

As long as I remain the same person I was yesterday, I can replicate yesterday's success.

Based on this belief, I dare not try anything, because once I try to change, I will no longer be the same person I was yesterday. Once I am no longer the same person I was yesterday, I can no longer replicate yesterday’s success.

Even when we try something new, we will be burdened with the past, fearing that if we don’t use the resources accumulated in the past, it will be unlikely to achieve new success.

For example, when smartphones began to become popular, Microsoft also saw this huge trend.

However, its idea was to develop a mobile operating system that would be compatible with software on Windows, rather than building a system entirely around the mobile phone trend - this strategy was a huge drag on Microsoft's development of Windows Phone at the time.

If I change my perspective, what I want is not to pursue growth itself, but to seize trends based on where I want to go in the long run to create a bigger future. Wouldn’t it feel different?

When Apple developed the iPhone, it actually subverted its own iPod, killed the iPod, and created a new business to support the old business.

P&G originally only sold soap. I think at the end of the 19th century, if P&G had positioned itself based on its past as a soap maker, its subsequent strategy might have been to focus on soap and deeply cultivate the soap industry chain, and it would have been difficult to see the P&G we see today.

But if we see that the greatest potential at the end of the 19th century was the emergence of radio media, which led to the establishment of national brands, we will naturally find that there is even greater room for development.

In fact, when I was reading history before, I found that ancient Chinese culture was the same.

After the Southern Song Dynasty, it lost its openness and began to define itself by the past, heading towards a path of self-closure - anything that met these standards was Chinese culture, and anything that did not was not, instead of remaining open and absorbing any culture like the Han and Tang dynasties.

An important judgment here is, which do you think is bigger, your past self or your future self?

Only when you feel that your future self is bigger, far bigger than the self you have created in the past, can you truly gain insight into trends and continue to create the future. Only then can we truly see the potential brought about by market expansion, demand migration, channel and media changes, and technological penetration and popularization, and follow this potential to create value.

2. The courage to focus on users rather than calculating pros and cons

When we are in a mindset of pursuing growth rather than creating value, another typical phenomenon is that we fall into a cycle of endless evaluation and judgment, and no matter how we calculate and judge, we cannot find the optimal solution.

For a brand, should it be multiple brands or should different products be unified under one brand? If you have multiple brands, you cannot reuse the potential of previous brands and it appears too scattered; if different product lines share one brand, according to positioning theory, it will distort positioning and cognition.

For Internet companies, should they develop a matrix APP or a large flagship APP?

For consumer product channels, should we focus on online or expand offline?

But if you switch your perspective to "What should I do if I want to solve the user's problem?", you will find that the answer is easier to find.

For example, brand strategy. In the TV advertising scenario, users watch advertisements and go to supermarkets to buy separately. They just need a brand to represent a category for easy memory, and they also need a simple slogan, a clear image and clear interest points.

Otherwise, when you go to the supermarket you still won’t know what to choose. At this time, you naturally need to focus on positioning.

But sometimes, for example, when a user buys snacks on Taobao, he just needs to buy more from one store and take a big gift package home, preferably from the same brand, so naturally one brand represents multiple categories.

Even whether you want to build a brand depends on what specific problems you want to solve for your users.

Gree needs to build a brand because users regret choosing air conditioners because the cost is too high, so they naturally need a stable brand to help them make judgments; Moutai needs a brand. When I invite friends to dinner and hope to serve a bottle of wine, my friends will know that the wine is very expensive, and it can show my importance to my friends without any explanation, so it naturally needs a brand with stable price and quality.

This is a very simple common sense, that is, the driving force behind growth must come from the continuous choice and use of users.

But more often than not, when we enter a mindset of pursuing growth, we will complicate many simple issues, calculating the pros and cons of every decision for ourselves, and our analysis becomes increasingly unclear.

We will work backwards to figure out what we should do for users based on what benefits we need, but this only makes us more and more tired.

• According to data analysis, an Internet APP needs to increase frequency in order to reduce traffic costs, so it adds many unnecessary functions to users.
• According to strategic analysis, a group company needs to develop diversified businesses to meet the needs of growth, so it forces itself to do many industries that it is not good at, and ultimately fails.
• A furniture company, according to benchmarking research, needs to increase the time customers spend in stores, so it learned from IKEA and opened multi-category experiential stores.

But what is overlooked is that IKEA’s starting point was not to increase the length of time customers spend, but rather how to solve the most important customer demand when it was rising - when I move to an unfamiliar city, how can I own a home in one day in one stop? This demand may be completely different when it comes to China.

Yes, we often learn a lot of "strategies" and "modes" and calculate the value that each strategy and mode brings to ourselves, but we ignore the most important needs of our most important customers and how to iterate ourselves based on the most important needs of these most important customers.

We want growth very much, but because of this, we focus all our attention on ourselves, calculating our own pros and cons, and thus we become further and further away from our customers.

This is like the Eighth Prince among the nine princes competing for the throne. With every step he took, he was calculating his own pros and cons instead of considering what the Qing Dynasty and his father really needed, so he was getting further and further away from the throne.

In fact, this is what I think is the biggest opportunity right now – how to redo all products based on the needs of a new generation of users.

Of course, due to space limitations, I will not elaborate on how consumer insights drive a company's business, because the most important thing is not the method, but the perspective. I can recommend Christensen's "Competing with Luck" here.

3. The courage to accumulate value rather than grab resources

There is also a typical practice that comes with falling into anxiety about growth: all practices are increasingly directed towards grabbing resources rather than accumulating value.

The case of the nine princes competing for the throne in "The Yongzheng Dynasty" mentioned earlier is like this. The more the crown prince and the eighth prince worried that they would not become emperor, the more they grabbed various short-term resources - such as gathering the resources of speculative ministers. This will instead make them lose the most important and scarce value in the long run, which is the accumulation of the emperor's trust.

I have observed that many companies and individuals that have reached a bottleneck, including myself, will take such actions.

For example, the more anxious a brand is about growth, the more it will cut prices for promotions and give concessions to channels. Sales may increase in the short term, but the brand will lose its potential energy (for example, after the implementation of the eight regulations, a large number of mid- to high-end liquor brands cut prices and damaged their brands. Moutai is almost the only one that believes that brand is the most important asset and will not sacrifice its brand and quality in exchange for sales).

For example, the more anxious a professional manager is about his or her promotion, the more he or she will demand greater power and manage a larger business scope, hoping to use such resources to do things and prove himself or herself. However, this will result in him or her not doing anything well enough and then losing trust.

For example, the more profit-demanding an Internet company is, the more it will calculate short-term ROI for every investment and will not do anything unless it breaks even. This will result in the company losing many opportunities that could bring about huge changes and the possibility of generating greater profits in the long run.

A friend of mine once told me that ByteDance’s growth department often optimizes not ROI, but the speed of seizing opportunities, because sometimes timing is the biggest cost.

In fact, this is also a strange phenomenon. We spend too much energy trying to grasp infinite and flowing things instead of paying attention to truly scarce and unchanging things.

For a prince, power is actually unlimited, and he can always get more if he wants to fight for it, but the emperor's trust is scarce.

For a brand, sales are almost unlimited and change every year, but users' minds about your high-end brand are scarce.

For a technology company, capital is almost unlimited (there will always be VCs waiting if you want to raise funds), but opportunities are scarce. Once you miss a major opportunity, you will have to wait a long time for the next one, and there is even the possibility of being disrupted.

What is the mentality behind this?

The more we pursue growth, the more we tend to get comfort from data (compare the cronies of the elder brother, the power and reporting lines of professional managers, the sales of brand companies, and the DAU of Internet products).

The more we seek this sense of comfort, the easier it is for us to grab the most easily available resources, which must be infinite and fluid, in other words, worthless.

Then we will enter a vicious circle. We give up truly valuable things in exchange for worthless things. The actual competitiveness we truly possess will become less and less, and growth will become more and more difficult. Then, in order to relieve anxiety, we will further grab resources, and the cycle will continue.

To break this cycle, I have to identify what is the scarcest and least liquid in my current environment. Sometimes it is brand, sometimes it is data, sometimes it is scarce supply, and sometimes it is talent. If the overall optimization goal is based on these, positive value accumulation will be formed.

IV. Conclusion

One important reason why "sustainable growth" is so difficult is that after a person or a company succeeds, they often no longer do the things that led to their success in the first place.

Their success in the past often came from being the first to seize opportunities for the future when others were stuck in inertia; it often came from having a deep insight into user needs and designing all actions based on this when others were not paying enough attention to users; it often came from being able to identify key values ​​and accumulate value when others were pursuing short-term resources.

However, once faced with huge growth expectations, it is easy to give up value creation in pursuit of growth, start to stick to the old ways and look to the past, start to calculate one's own pros and cons instead of paying attention to users, start to grab short-term growth data to increase a sense of security, and eventually fall into a bottleneck.

My biggest feeling recently is that to break the vicious circle of growth bottleneck, it is often necessary to fundamentally switch one's perspective, from a perspective of pursuing growth to a perspective of value creation, and this requires great courage and faith.

Author: Li Jiaoshou

Source: Professor Li (ID: Professor-Li)