In last weekâ€™s newsletter we featured Scale: The Universal Laws of Life, Growth, and Death in Organisms, Cities, and CompaniesÂ by Geoffrey West as our book recommendation of the week.
Ready to geek out on power laws, fractals, and connections between the natural world and the man-made? This book took our curiosity soaring several times and is a relevant read for those navigating the growing pains of a startup going from a two person team to 200, or VC firm going from 2 partners and $25M to a second or third fund 10x that size.
While building Mattermark I spent the past 5 years studying how companies grow, and exploring how we might detect this growth and describe it using data exhaust that is publicly available online. This cross-disciplinary study, embarked on by theoretical physist West, connected some new dots for when it comes to what growing companies have in common with other scaled up entities. From our thousands of sales conversations, we knew ancedotally that of all the signals we were tracking at Mattermark the most significant (and hardest to get) was employee count. Seeing how the size of a company changes over time is a leading indicator of itâ€™s ability to metabolize capital into revenue. But what can the 8 person version of a startup tell us about the 80 person, or 800-person, version of the future?
This is one of many questions explored in â€œScaleâ€
I also loved Westâ€™s observation that there is far less written on the death process than on the origins of life and growth (read Ernest Beckerâ€™s â€œThe Denial of Deathâ€ for one theory on why this is), which reminds me how much less we know about how companies die (or exit). Crunchbase works harder than most data-driven private company platforms to update their â€œDeadpoolâ€ of companies and itâ€™s still incredibly difficult. The knowledge of how to sell companies is also tribal and hard to find, though I am currently reading â€œThe Magic Box Paradigmâ€ by Ezra Roizen and hoping it will become a go-to recommendation for me when founders ask about this in the future. Iâ€™ll report back in a future review!
Reading Notes:Â This book was fantastic as an audiobook on Audible, read at 1.5X speed at is about ~13 hours of listening.
Further Reading: â€œOn Growth and Formâ€ by Dâ€™Arcy Wentworth Thompson â€” West gushes about this book as beautifully written, and it only comes in paper/hardback. It just arrived, and it is loooong. Perfect for the cold Denver winter just around the corner.