Why VCs Push for Growth at All Costs — An Evolutionary Answer

I never understood why VCs used to push for growth at all costs. Growing fast means having a rate of return, a rate of change, faster than everyone else around you. Why is that the thing that matters? Why not profitability first, or product quality, or customer love? Why this obsession with the slope of the curve?

I had an epiphany today, and I think I finally see it.

It connects back to evolutionary history.

In evolution, it is not the biggest that wins. It is not the fastest that wins. It is not the strongest that wins. It is the one who adapts quickly — the one who changes the quickest according to what the current environment is asking for, and who is able to change and grow very quickly inside that environment.

There are really two cases, and both are about rate of change.

One: the environment changes. If you change very quickly in response, you survive. The slow ones, however large or strong they were in the old world, simply don't make it across.

Two: the environment doesn't change — it persists. In that case, if you grow very quickly inside that environment, you take more of it than anyone else, and you survive on the other side of the squeeze.

Either way, the variable that decides who is around in the long run is rate of change. Rate of adaptation. Rate of growth. Not size. Not strength. Not history.

And once I saw that, the VC model snapped into focus.

The VC push for growth at any cost is not really about growth as a vanity number. It is a bet on rate of change as the deciding factor. They are pattern-matching, consciously or not, onto the same logic that has been running for billions of years in biology. The companies that compound their rate of change the fastest are the ones that get to define the next environment. Everyone else is fossil record.

This also explains, very cleanly, why incumbents die.

In a particular category, in a particular section of capitalist society, incumbents don't have incentives to change. They are already winning the current frame. Their org charts, their P&L, their bonus structures, their internal politics — all of it is optimized to keep the current shape of the company intact. The whole machine is built to resist a fast rate of change. That is what kills them. Not laziness, not stupidity — a structural disincentive to move quickly.

Meanwhile, the challenger has nothing to protect. The challenger is rewarded for changing fast and growing fast, because that is the only path that gets them to "alive" in the next round. So the challenger evolves, and the incumbent freezes, and the gap closes from the bottom.

If you change super fast and grow very quickly, you will win. That is the rule. Hence the VCs' push to grow at a very fast rate actually makes sense, because what they are really funding is rate of change.

Looked at this way, "growth at all costs" stops sounding like greed or recklessness. It starts sounding like a survival instinct, dressed up in a term sheet.

The Utility Exchange

There is a single act around which all of human commerce — and arguably all of human society — organises itself. It is not sales. It is not marketing. It is not branding, retention, loyalty, or any of the words we have invented to slice the work into departments. It is the utility exchange: the moment one person hands something of value to another and receives something of value back.

Everything else is scaffolding around that moment.

The Two Halves of Every Business

Once you accept that the utility exchange is the centre of gravity, every activity in a business sorts itself into one of two buckets, and only two:

1. Everything done before the utility exchange. This is what we usually call marketing — but it is wider than that. It is awareness, positioning, education, trust-building, the entire choreography of getting two parties into the same room with aligned intent. It is the work of arriving at the exchange.
2. Everything done after the utility exchange. This is retention — but again, wider. It is the experience of the product, the support, the follow-up, the reason someone comes back, the reason someone tells a friend. It is the work of honouring the exchange.

The act of exchange itself — what we usually call "sales" — is the hinge. It is not a department. It is the instant at which "before" becomes "after."

Once you see the picture this way, the org chart starts to look strange. Why do we have a marketing team and a sales team and a customer success team as if they are three different sports? They are three positions in the same game. There is one act, and there is what comes before it and what comes after it.

The Order Most People Follow

The default sequence in almost every company is:

Marketing → Sales → Retention.

Get attention first. Convert it. Then, if there's budget left, take care of the people who said yes.

This order feels natural because it tracks the customer's chronology — first they hear of you, then they buy, then they stay. So we build the company in the same order. Marketing is the loudest team, sales is the most measured team, and retention is the team that gets attention only when churn becomes a board-meeting word.

This order is exactly backwards.

The Order I Believe In

Retention → Sales → Marketing.

Build retention first. Build the act of exchange second. Build marketing last.

Here is why the inversion matters.

Retention is the truest signal a business has. It is the only metric that cannot be bought, faked, or front-loaded. A customer who stays is telling you, in the most expensive language available to them — their continued time and money — that the utility you delivered was real. If you do not have retention, you do not have a product. You have a leaky bucket, and pouring marketing into it is not strategy, it is theatre.

So the first job is to make the after-exchange experience so good that people would feel the loss if you disappeared. This is harder than it sounds because it cannot be solved with copy or campaigns. It can only be solved by actually delivering the utility you promised — and then a little more.

Once retention is real, the act of exchange — sales — becomes almost easy. A salesperson selling a product with great retention is selling something that is true. A salesperson selling a product with poor retention is selling something that is, in some quiet way, a lie. The first is sustainable; the second corrodes the salesperson and the company together.

And only after both of these are working should marketing come in. Because marketing without retention is amplification of a leak. Marketing without a believable act of exchange is amplification of friction. But marketing on top of a tight retention engine and a clean sales motion is leverage — every rupee spent compounds because the system catches what marketing brings in and keeps it.

The conventional order spends the most on the weakest foundation. The inverted order spends the most on the strongest.

Why This Generalises Beyond Business

Step back further. The utility exchange is not just a commercial act. It is the molecule of social life.

A friendship is a long sequence of utility exchanges — emotional, informational, sometimes material. So is a marriage. So is a teacher and a student, a doctor and a patient, a government and a citizen. Each of these relationships has a before (how trust was built, how the parties arrived at the willingness to exchange) and an after (whether the exchange honoured what was promised, and whether the parties wish to exchange again).

The reason society holds the shape it does is that an almost incomprehensible number of these exchanges are happening at once — across categories, across planes, across spheres — and each one is reinforcing or eroding the next. The social fabric exists, in a real sense, to service the utility exchange. Roads, language, contracts, courts, currency, manners — all of it is infrastructure built around the simple need for two parties to safely hand something to each other and trust that the handing meant something.

If you accept this, then the retention-first principle is not just a business idea. It is a way of being. In any relationship, in any role, the question worth asking first is not how do I attract more counterparties — it is am I worth coming back to?

The One-Line Version

Marketing is the work of getting to the exchange.
Sales is the exchange.
Retention is the work of being worth the exchange.

Most people build in that order. Build in the reverse.

The game you choose picks your life

The type of game you choose to play in life decides almost everything about you. Your stress. Your social circle. Your health. How rich you'll end up.

It's not your effort. It's not your discipline. It's the game.

There are different games available. Employment is one. Entrepreneurship is another. And inside each, more games.

You can be self-employed and call it a business — that's one game. You can build something where thousands of people work under you — that's a completely different game. You can pick a specific financial freedom number and play only for that. Or you can opt out and play no game at all.

Each game ships with its own growth rate. That's the part most people miss.

If you're running a real business, you have to grow — your thinking, your deduction, your understanding of the customer — at the speed your sector demands. If you don't, a competitor will. They'll get there before you. They'll kill you. The growth rate is not a choice inside the game. It's the floor.

Employment has its own floor. Usually 10–20% a year. That one number silently decides what your life looks like. Your house. Your car. Your kids' school. Your weekends. What you can refuse and what you have to swallow.

If your game is 10x a year, your life is unrecognizable from the 10–20% person's life. Different stress, different friends, different health, different wealth.

If the game is 100x or 1000x in two or three years, the person playing it is a different species by the end. Not the same human who started.

So the question isn't "how do I work harder."

The question is: which game am I in, and is it the one I actually want?

Most people never ask. They inherit a game from their parents, their school, their first job. They optimize inside it. They never look at the game itself.

But the game decides the math. The math decides the life.

Pick the game first.

Talking To Yourself Isn't Crazy. It's One Of The Most Underrated Mental Tools You Have.

For most of my life, I assumed talking to myself was something I should hide. You catch yourself muttering in the mirror, narrating your to-do list out loud in the kitchen, rehearsing a difficult conversation in the shower — and the cultural reflex is to feel a little embarrassed about it. "Don't let anyone catch you doing that."

Turns out, the people who do this regularly might be quietly running one of the most effective self-regulation hacks the human brain has.

The Research Nobody Told You About

Ethan Kross runs the Emotion and Self-Control Lab at the University of Michigan. He's spent the better part of two decades studying what he calls "the inner voice" — the running monologue that lives in all of our heads. His research, summarized in his book Chatter, lands on something counter-intuitive:

The problem isn't talking to yourself. The problem is how you talk to yourself.

Specifically, Kross found that when people refer to themselves in the second or third person — "Kumar, you've got this" instead of "I've got this" — three things happen, measurably:

1. Cortisol drops. Stress hormones decrease within minutes.
2. Performance under pressure goes up. Public speaking, hard conversations, high-stakes decisions all improve.
3. Problem-solving gets clearer. People give themselves better advice than they give themselves when stuck in first-person rumination.

He calls this self-distancing. Stepping back from your own experience just enough to look at it like you'd look at a friend's problem.

Why Speaking It Out Loud Matters

Thinking and speaking aren't the same thing.

Silent thoughts loop. They're vague, emotional, half-formed. You can spend forty minutes "thinking about" a problem and emerge with nothing because your brain was just churning the same anxiety over and over.

The moment you say it out loud, three changes happen:

• It has to become a sentence. Vague dread turns into "I'm worried this client will churn next month." That alone is half the work.
• You hear it. Auditory feedback engages a different processing system than internal thought. Your brain reacts to your own voice the way it reacts to someone else talking to you — which means you can actually consider the statement instead of just being inside it.
• It externalizes the load. Journaling works for the same reason. Once a worry is outside your head — on paper, in the air — your working memory frees up.

This is why people who narrate their work out loud often code faster, debug better, and make fewer mistakes during complex tasks. Rubber-duck debugging is a real engineering technique for a reason.

The Founder Angle

I run a company. Most days I'm shifting between four or five completely different contexts — an Amazon listing crisis, a new hire decision, a tech product roadmap, a cash flow question, a sales call. Each one demands a different mental model.

What I've noticed — and what Kross's research backs up — is that talking to myself is the cheapest possible context switch. Walking from one room to another, narrating "okay, we're done with ops, now we're thinking about hiring," is doing actual cognitive work. It's flushing the previous frame and loading the next one.

It's also the cheapest possible therapist. A two-minute monologue while making coffee, where I literally say "Kumar, what is actually bothering you right now?" — out loud, second person — surfaces things that hours of silent worrying never would.

When To Worry, And When Not To

The line between healthy self-talk and something concerning is actually pretty clear:

Normal and healthy:

• Narrating tasks
• Rehearsing hard conversations
• Venting and problem-solving
• Motivating yourself
• Processing emotions out loud
• Running through plans before executing

Worth paying attention to:

• The voice feels like it isn't yours
• You're hearing responses you didn't generate
• It's replacing, not supplementing, human connection
• The tone is consistently cruel and you can't stop it

The first list is just thinking with your mouth open. The second list is when it's worth talking to someone.

The Practical Takeaway

If you already do this, stop being embarrassed about it. You're not the weird one — the people who don't do this are missing a tool.

If you don't, try the smallest version: next time you're stuck on a problem, walk into a room alone and describe the problem out loud, in second person. "Okay, you're stuck on X. What's actually the blocker here?" Two minutes. Watch what happens.

The most useful conversations of my week are usually the ones I have with no one in the room.

Inspired by Ethan Kross's work at the University of Michigan and his book Chatter: The Voice in Our Head, Why It Matters, and How to Harness It.

Code Is Cheap. Taste Is Expensive.

Cat Wu runs product for Claude Code at Anthropic. Her team ships features in a day. Not a sprint. Not a week. A day. And she just told Lenny Rachitsky something that should rewire how every operator thinks about building right now: the cost of writing code has collapsed, and the skill that matters is deciding what to write.

That is the entire shift. Everything else is a consequence of it.

For two decades, product management was a coordination job. You wrote PRDs, aligned partner teams, negotiated quarterly roadmaps, and shipped a feature every month or so. The work was slow because code was expensive. Teams needed four months to build a thing, so a PM spent four months making sure the thing was worth building.

That calculus has inverted. When a feature can be stood up in a day, the bottleneck is no longer engineering capacity. It is taste. It is knowing which of ten thousand GitHub issues is worth touching. It is knowing whether the current model can actually pull off the feature you are imagining, or whether you are shipping a broken promise.

Wu's own team operates on a rule worth stealing: ship almost everything as a research preview. Brand it clearly as an early idea. Tell users it might not survive. This one framing move reduces the commitment to a feature from "we shipped it, we own it forever" to "here is a draft, tell us what works." Commitment becomes cheap. Feedback becomes the roadmap.

If you are running an agency or a D2C brand or a tech platform, steal this verbatim. Half the reason your team ships slowly is because every release is treated as a marriage. It isn't. It is a first date.

The second thing worth sitting with: Wu openly says the PM role and the engineer role are merging, and Anthropic is hiring engineers with product taste over PMs who cannot ship. Designers on Claude Code write frontend code. Engineers take an idea from Twitter and turn it into a working feature by lunch. The PM job survives only as a multiplier role for people who can already build. The pure-coordinator PM is a dying species. Operators who cannot at least drive a coding agent are about to be priced out of their own product.

The third lesson is the one that hits the hardest, and it is buried under all the talk of velocity. Wu calls it the last-mile rule. Building 95% of a feature is the easy part. Pushing it from 95% to 100% — where it actually works for users every time, not just in the demo — is the entire job. Most teams ship half-baked features because the model fails five percent of the time, and now you have a broken process that you half-trust, which is worse than no process at all. Either put in the elbow grease to push it to 100%, or do not build it. The middle ground is the worst place to be.

Watch Amazon sellers and D2C operators doing this weekly. They build a half-working repricer, a half-working ad bidder, a half-working review responder, and then spend more time babysitting the automation than they saved. Wu's point is simple: the last mile is the entire job. Skip it and you have bought yourself technical debt dressed up as productivity.

There is a deeper layer under all of this, which is how Anthropic itself moves. Wu said that if Claude Code failed but Anthropic succeeded, she would be happy. Teams trade off against one another openly because the mission sits above any product line. That clarity is why the company ships a feature a day across a dozen surfaces without tripping over itself. It also explains some decisions that looked weird from outside — like sunsetting features built for old models because the new model makes them unnecessary. You don't carry around scaffolding that was put up to compensate for a previous model's weakness; you assume the next model will close that gap and you build with that future capability to catch up. Code review was exactly this — attempted for two years, only launched when Sonnet 4.6 could actually catch bugs.

If you are building for today's model only, you will be blindsided every quarter when a new model changes what is possible. Build for six months from now. The model will eat your harness for breakfast, and the things you scaffolded around to compensate for its weaknesses will quietly become unnecessary. That is the point. Remove the crutches. Keep the scaffolding honest.

The one-line takeaway: stop coordinating, start shipping. Stop prototyping, start using. Stop pretending 95% is done.

The bar moved. Your roadmap should too.

Source: Cat Wu on Lenny's Podcast

Create. Spread. Kill.

Every brand on Amazon moves through three phases. Most never get past the first.

1. Create space for yourself

You don't enter a category. You carve a hole in it.

One keyword. One use case. One price point. One thing you can own before anyone notices you exist.

This is not about being everywhere. It is about being undeniable somewhere.

Most brands skip this. They launch wide and show up as the fifth-best option on twenty keywords. Fifth-best is invisible. Fifth-best dies.

Create space first. One inch of territory you fully own.

2. Spread yourself

Once you own one thing, you expand from it.

More ASINs. More variants. More keywords. Every search a buyer might run should eventually surface you.

The customer who searched "study lamp" should also find you when they search "reading lamp," "bedside lamp," "LED desk lamp," "table lamp for office." Same brand. Different doors. Same shelf at the end.

You stop being a product. You start being a presence.

This is where the flywheel turns. Each ASIN feeds reviews into the brand. Each keyword feeds ranking into the others. Spread compounds in a way a single-product strategy never can.

3. Kill the category

Most brands don't believe this phase is real.

It is. We did it with table lamps. Nobody comes close. The category isn't competitive anymore. It is ours.

Killing the category means you hold the #1 BSR. You also hold #2. And #4. And #7. Half the search results page is you. Buyers stop comparing. They just buy.

Competitors can't catch up even when they try. Your review base is too deep. Your ranking is too entrenched. Your data on what sells, at what price, with which images, in which season — they don't have it. You do.

This is the endgame. Not market share. Market ownership.

The order is the strategy

Brands fail when they confuse the phases.

They try to spread before they create. They try to kill before they spread. They go wide and shallow and get drowned out.

There is no shortcut. There is only sequence.

Create first. Spread second. Kill third.

The Year You're Off By

Dario Amodei thinks there's a 90% chance we get a country of geniuses in a data center within ten years. He says it in public, with a straight face. He will still not buy a trillion dollars of compute.

The CEO who believes — really believes — that his own product is about to become the most valuable thing in history refuses to place the bet his conviction implies. Not because the compute isn't available. Not because he can't raise the money. Because if the revenue curve slips by one year, Anthropic dies.

This is the economics of certainty-of-utility in plain sight. Believing the payoff arrives is cheap. Believing when it arrives is expensive, and it's the only variable the check-writer is pricing.

Attach yourself to an exponential. But budget for the year you're off by.

Source: https://youtube.com/watch?v=n1E9IZfvGMA