On Exponential Growth

2025.11.02

CXXIV

[Lots of Lead Bullets; Accounting 101; The Three Legged Stool; Marketing Compounding; Sales Compounding; Product Compounding; The Unmoving Contrarian; The Crash Course]

Thesis: How bookkeeping, marketing, sales, product, and market tailwinds can conspire to massively improve your business.

[Lots of Lead Bullets]

My startup, BirdDog, has had crazy growth over the last 3 months: we've doubled prices & tripled revenue while maintaining really high margins.

I'm not going to pretend I know exactly what happened, but I have quite a few ideas. I want to share an overview of what I think are some of the most important things while I'm still very close to what happened.

That being said, this is one of the most dense posts I've ever written. On it's own, each section could be at least one post, maybe more. We'll go over each of the following:

• Accounting

• Marketing

• Sales

• Product

• Market tailwinds

I'm leading with accounting because I it had the most unexpected impact on performance, it's easy to do yourself (takes me 1 hr / mo in a spreadsheet), and I wish I would've done it sooner. And, I include a crash course below my signature.

I also want to give a disclaimer: what we've done is super impressive, but BirdDog hasn't "made it" by any means. There are still tons of things to be solved and new problems that we'll have to deal with in the future.

[Accounting 101]

Jack & I founded BirdDog in July 2024. 11 months later, we paid ourselves for the first time.*

This was a much bigger inflection point than I realized.

Since we paid ourselves off of June's profit, we had to know what June's profit was. To know what June's profit was, we had to do bookkeeping for June.

Across most domains of my life, I've been able to most rapidly improve after I started tracking data. When trying to lose weight, step one is weighing yourself. When trying to get strong, step one is seeing how strong you are.

This is what the accounting forced us to do with BirdDog--see EXACTLY where we were. And, since revenue wasn't close to what we wanted to see, it was a wake up call.

The good news was that margins were epic, and it looked like they could stay really good.

Seeing this data was the kick in the ass we needed to really pick up everything we were doing. And, it gave us a concrete way to benchmark performance.

Now, I'm not going to sit here & tell you that the accounting was a silver bullet by any means, because it wasn't. But it's a good jumping off point for an analysis of how we tripled revenue and doubled prices in 3 months, because it's the most notable thing that happened before we had such rapid improvement.

And, for that reason, I wish we had:

1. Started bookkeeping sooner

2. Started paying ourselves sooner

There is some point in your startup journey where bookkeeping is probably a waste of time; it's enough to know you're not losing too much money. Especially if you did what Jack & I did, and just spend as little money as possible each month.

But, I do think that pretty shortly after you get profitable, you should start some simple accounting & paying yourself off of profits, even if it's only $.10.

Money is a good motivator, and seeing something go up and to the right is super helpful and inspiring, even if it starts small. It gives you something to optimize for.

Of course, hindsight is 20/20, but if you don't know anything about accounting & want to see how simple it is, I've included a super brief crash course below my signature. I spend 1-2 hours on it a month.

*Check out this post for how we were able to survive 11 months without paying ourselves (spoiler - I lived at my parent's house, Jack kept his job)

[The Three Legged Stool]

One of the ways that I view businesses is as a combination of Marketing, Sales, & Product.

I think if any one of these three is super strong, it can help carry the others.

However, each of these three feed into each other, sort of like a funnel.

Marketing gets many people excited to talk to you, sales is a series of conversations that clarifies and convinces the prospect that they should actually use your product or service, and product actually provides the value that the other two promise.

It's not a straight line from marketing to sales to product, because all three are interconnected: customer stories from product get mentioned in marketing and sales, the marketing that works the best gets mentioned in sales calls, the features that are most exciting to prospects in sales meetings get more attention with product development, etc.

When all three of these are not just working really well on their own, but also working together in concert, I think that’s what you’d call Product Market Fit (PMF).

I don't bring this up because BirdDog is at PMF yet; we still have some way to go. Rather, I'm bringing it up because I'm about to talk about Marketing, Sales, and Product one by one, but don't want to ignore the important fact that the more they work in concert, the better off each is.

[Marketing Compounding]

At some point, your business shifts from looking like two guys in a garage to being perceived as "legit." Over the last 3 months, we've had more and more people tell us that "something happened" that makes them feel like BirdDog is a "real business."

This means that when people come into our sales calls, they're less "curious" and a lot more pre sold on what we do. They also understand the product better and then benefits it gives without us having to do as much education.

What happened? We didn't get an office and hire a bunch of people or anything. Rather, I think these are some of the biggest things that went into it:

• One Year Mark: BirdDog turned one year old in July. It seems cliche, but there is something validating about passing one year as a business in one market tackling the same problem

• Website Rebrand: Jack totally redid the website, and it looks way more professional

• Logos: At the end of June or maybe in July, we added ~5 logos to our website. Now there are ~20. We got permission to put all of them there. This is super validating that companies not only use us, but trust us

• More Customer Stories: We have quite a few customer stories we can share in marketing material now. This makes the problem & solution very clear and plain for prospects.

On top of all of this, I've been told that our marketing language is simply more confident. Which is really cool to hear, because we really do think it is earned confidence.

Again, no silver bullets in marketing, but a lot of lead bullets, indeed.

[Sales Compounding]

When we started BirdDog, our "win rate," or probability of closing someone we had a first call with (and didn't disqualify), was under 1%.

This was very bad.

Now, it is over 30%.

This is super healthy.

As I mentioned, marketing has helped with this--the people who show up on the other side of the video call are more educated about what we do and are a better fit.

Here are some of the other things that recently went into improving this:

• Controlling the Call: We start every sales call by building credibility with our story and then explaining succinctly & directly the benefits that BirdDog will provide.

• Better Feedback: I sent more call recordings to my coach Ted & my friend Mridul who both helped identify issues I was missing

• Raising Prices: We doubled our unit price. I think this was SUPER important to set us further from "selling leads" to being an intelligence solution.

• Objection Handling: We've gotten a lot better at handling objections by seeing through to the underlying concern and directly addressing it.

• Tracking: We started using a proper crm. Like the accounting, there is a positive psychological effect of seeing dollar values attached to each deal we're working.

• Pre Qualification: When someone goes to book a meeting with us, we ask qualification questions to see if they're going to be a good fit. This makes us feel more professional and makes sure we're talking to the right people.

All that being said, I can't overemphasize how important a massive amount of repetitions has been at improving this process.

[Product Compounding]

Building a great product is hard. But the closer your product is to great, the more of the marketing & sales it does for you. And, the longer your customers will stay when they buy it.

By June, I think BirdDog had a good product. Since then, we've been focused on a lot of changes that bring it closer to great.

Some tweaks we've made:

• More Control to Users: We gave users further control over data quality by giving them additional prompting per signal

• Removing Features: We had some very lightweight people data. Lots of prospects/customers asked for it. It was not done well. We drew a line in the sand around functionality and got rid of it. This made the value prop more clear.

• More Intuitive UI: Jack has made some amazing changes to the front end to make it cleaner and more intuitive

• System Integration: We push data in and out of CRMs now, which is where sales people already work. Means they can use the data in a lot of other places more easily.

• Massive Data Improvements: I've rewritten our account finder 3 times over this period. It's working real well even for cases that it used to fail on. That's on top of many other data quality tweaks.

The biggest take away here is that our product is more focused and simply better. We've de emphasized or removed our weakest features and have been doubling down on improving our best ones, while also ceding more control to the users.

[The Unmoving Contrarian]

I'm not going to get so much into this one, as it's probably where we got luckiest & also it's the most competitively sensitive, but there are about 3 or 4 tailwinds in our market that are becoming increasingly favorable for us.

It's cool to see, because we consciously bet on these beliefs near the start of BirdDog.

I say we got lucky, though, because they're playing out a bit faster than we thought they would, and this would have been the easiest place for us to be wrong. But, if they keep going in the same direction, a lot more capital will unlock for us via customer dollars rotating.

This is the vindication of our answers to the classic Peter Thiel / VC question of "What important truth do very few people agree with you on?" More broadly, it is good validation to the power of being a contrarian.

Jack & I got told by a LOT of people that these core beliefs about the sales tooling landscape were wrong or not very meaningful. We're really happy to now have super strong evidence that those beliefs were actually right.

The takeaway?

It’s really powerful when you’re right and they’re wrong.

If this post was at all useful for you on your own journey, please subscribe - I post content about founding, philosophy, tech, and life every Sunday.

[The Crash Course]

There you have it, my crash course in bootstrapping.

Again, I won't pretend that there's "one secret" you can copy to build a business. I really do think it's a lot of lead bullets & no silver bullet.

And, I'm not going to act like "BirdDog has made it!"

We're very happy of our progress, but we're still a fledgling business with risks we're addressing.

Regardless, I hope that what I've shared can be at least a little helpful if you’re starting a business or growing one you already have.

Live Deeply,

[Accounting Crash Course]

Simple accounting is not so hard. While for taxes or investor reporting, you should definitely have a CPA, for internal benchmarking and decision making, depending on the complexity of your business, you can probably get a good approximation yourself.

Here are the basics:

• Revenue: This is the total amount of money you recognized in that month.

• COGS: What you spent delivering the product / service. If you're a GPT wrapper, this is where you put your API expenses

• Gross Profit: Revenue - COGs; how much you have left after you deliver the product / service

• SG&A: Any other costs you need to run the biz. Salaries, software subs, etc.

• Net Profit: Gross Profit - SG&A

Most software businesses can stop there. If you have Capex (see here), things get a little more complicated, but you'd basically subtract that from net profit to get Free Cash Flow, and then you also have to deal with depreciation.

It’s very important that you’re consistent with how you recognize things. As an example, if you get paid for an annual contract, you’ll probably want to recognize 1/12th of that money every month for the next year. You can and sometimes should get more complicated than that, but for this very simple model, I wouldn’t.

So, in summary, we have:

Net Profit = Revenue - COGS - SG&A

You want revenue to go up, and you want net profit to go up, too.

You can do this all in a spreadsheet. It takes me less than an hour a month, and then I spend another hour making distributions and staring at it and thinking about it and talking with Jack on it.

Disclaimer: I’m not an accountant, this isn’t tax advice, etc etc etc