How cargo cult growth hurts early-stage startups
You’re the founder of an early-stage startup that’s struggling to gain initial traction in the market. You spend time researching the competition, trying to reverse engineer the strategies and tactics they used to reach their dominant positions. You take what you’ve learned and carefully implement it at your own startup. But it doesn’t move the needle.
Say hello to cargo cult growth.
Wikipedia describes a cargo cult as “a belief system among members of a relatively undeveloped society in which adherents practice superstitious rituals hoping to bring modern goods supplied by a more technologically advanced society.”
A simpler description of the idea could be: “We want what they have, so we’ll mimic what they do, even though we don’t understand why they are doing it.”
The concept began with literal cargo, but it’s also a useful way to describe the growth initiatives found at many early-stage startups. Founders seek out the strategies and tactics that are being used at larger, more successful companies, and try to apply them at their own company.
And this is where the cargo cult behavior begins. The founders are attempting to copy the actions of the more successful company, without understanding the context that lies behind those actions. And just like the original cargo cults, they are going to be disappointed when these copied actions don’t achieve their desired results.
Cargo cult growth: An example
“Putting content behind a registration wall to increase user signups”
Quora is a popular platform where users can ask and answer questions on a diverse range of topics. The content has historically ranked well on Google, bringing them large volumes of organic traffic at relatively low cost.
If you head over to Quora now and start navigating around you’ll soon be presented with a registration wall, a popup modal that forces you to sign up for a free account if you want to view the content.
This registration wall gives Quora the opportunity to convert website visitors into far more valuable users. Recently, they’ve gone one step further and placed some of their top content behind an additional gate that is only available to users with a paid Quora account.
If you were the founder of an early-stage content-focused startup it would be easy to look at Quora, see their forced registration signup flow and think “that’s a great strategy. We’ll get organic traffic via search and then force people to sign up to view the content, converting our free traffic into users”.
But there’s a problem. Yes, Quora has a registration wall, and yes, they have been very successful with SEO. But placing the majority of their content behind a registration wall was not the strategy that helped them achieve their initial success.
Quora relies on a small subset of visitors who create the content that everyone else consumes – in this case, the questions and answers. In the early days of the platform’s life, the user generated content (UGC) was freely available for all website visitors to view without having to sign in to an account. Importantly, this also meant that the content was available for Google’s web crawlers to read and index. This wealth of user generated, crawl-able content was great for SEO, leading to strong keyword ranking positions on Google’s search results pages and bringing Quora a steady stream of low-cost organic traffic.
Of course, things have now changed. I think a case can be made that the forced registration strategy is only viable because they were able to leverage the initial “open content” strategy to gain a foothold in the market. If an early-stage founder tries to copy their “gated content” strategy with the hope that they’ll be able to 1) bring in lots of organic traffic and 2) convert them to users, they will probably be disappointed with the results.
When inspiration becomes cargo culting
It’s not an inherently bad idea to look for guidance or inspiration from more successful companies. People copy each other all the time, with varying degrees of success. Just look at Instagram, who “borrowed” their Stories feature from Snapchat and Reels feature from TikTok. So what mistakes are we making when we turn positive imitation into cargo cult behavior?
We’re listening to the “wrong” experts
Cargo culting may stem from a lack of experience or expertise (more on this later), but we also run into problems when we listen to the “wrong” experts. When you’re trying to grow it’s natural to look towards people who’ve successfully “been there and done it” already. But there are stages to the success ladder. Most of the popular industry figures and experts are known to us precisely because of their huge success. But as a result of this success, they can often be found working at large companies where they have a wealth of resources at their disposal. They are at the top of the ladder.
When they share knowledge and advice we should expect that some of it will be tailored towards the people and companies on similar stages on the ladder. Their advice isn’t wrong, but if you’re an early-stage founder then it may not be relevant to you. You need to apply filters to expert advice and make sure it’s applicable to your current situation.
We’re playing different games
You’re more likely to hear about the strategies and tactics being used at large, successful companies than companies at your scale, for fairly obvious reasons. But large, successful companies don’t have the same goals, priorities or problems as you. As an example, as an early-stage startup founder you’re probably focused on gaining initial traction or finding product/market fit. A more established competitor may be trying to build moats that they can use to secure their market-leading position. Cargo culting their activities wouldn’t bring you closer to your goals, as a moat is only useful if you have something that’s worth protecting.
We aren’t copying the actions they took when they were our size
When we mimic the activities of larger, more successful companies we are making a mistake of scale – we are not copying the actions that made them successful, we’re copying the actions that they are taking while they are already successful. It’s as if I was trying to mimic the financial decisions of Warren Buffet in the hope they would make me rich, when in reality his current wealth stems from a very different set of decisions made decades ago.
But looking back won’t always help
Okay you say – I’ll do my research and figure out the strategies and tactics the successful company used to grow back when they were an early-stage startup. Unfortunately, this still risks becoming cargo cult behavior.
The value of all marketing channels and tactics decays over time. Things that worked in the past generally won’t work as well now or in the future. Andrew Chen, partner at Andreessen Horowitz, calls this the law of shitty clickthroughs, and you run into it all the time when you’re working marketing and growth. Google Ads were much more effective in the early days when competition was low and clicks were cheap. The first websites to add newsletter signup popup modals converted a higher percentage of visitors because we weren’t already overexposed to the behavior, and so on. I’m not saying that older strategies or tactics are useless by definition, but if we do use them, we need to set realistic (which usually means lower) expectations.
We are making assumptions about outcomes
Finally, cargo cult behavior frequently comes alongside a huge, and often wrong, assumption: that the larger company’s activities actually had a positive outcome. We can’t see “under the hood” at these companies so it’s easy to assume that everything is always rosy and “up to the right”. In reality, they may be testing strategies or tactics that are failing.
The large size and overall success of these companies can hide the negative impact of failed experiments, allowing them to “get away” with things that you can’t. They have the resources to throw millions at an idea as an experiment, then shrug their shoulders and move on if it doesn’t work. As an early-stage founder, that is a luxury you don’t have.
Why do we do cargo cult?
We’ve looked at an example and gone through some of the reasons why positive imitation can turn into cargo cult behavior. But what causes us to do it in the first place?
Lack of experience
In many cases it simply comes down to a lack of experience. And this is understandable – if you’re an early-stage founder from a technical background then you can’t be expected to also be an expert in all things marketing and growth. You’re going to be extremely busy building your product and running your business, so it’s only natural to look around and take notice of what other companies are doing.
The need to succeed
The intense pressure to succeed can also drive cargo cult behavior. Taking your startup from 0 to 1 can be an incredibly stressful process, and it’s even worse if things aren’t going to plan. You know your employees, investors and family are relying on you. You may simply reach the point where you are willing to try anything, and as I’ve outlined above, this can result in following advice that simply isn’t helpful.
How cargo culting damages startups
The early stages of a startup’s life are hectic, and two things that are generally in short supply: time and money. Unfortunately, cargo culting usually ends up with us wasting both, when we can least afford it.
But the negative aspects can go further. Working hard and not seeing positive results is frustrating, and over time it leads to decreased motivation and morale. I’ve experienced enough periods of flat or decreasing growth to know it isn’t a pleasant experience. You’re working incredibly hard and feel you’re doing everything right – after all, you’re “following best practices” and doing what the ‘best” companies do, but it’s not moving the needle.
When we add up the losses to time, energy, morale and motivation, it’s easy to see how damaging cargo culting can be.
How to avoid cargo culting growth
If we want to avoid the negative outcomes of cargo culting, then we need to prevent ourselves from falling into its trap.
Before diving headfirst into new marketing or growth initiates we should ask ourselves:
Why are we doing this?
Make sure you have a better reason than “we’re doing this because Company X has done it”.
What are we trying to achieve?
Figure out your current priorities, then make sure that any new initiates that you start can actually help you achieve your goals.
This is not a good formula to use for your marketing and growth initiates
Do we understand what we are doing?
You should be able to outline a path that takes you from your plan to your intended outcome. If you do decide to follow another company’s lead, make sure you understand why they made any decisions they’ve made.
When listening to the advice of an expert: is it relevant?
Keep your filters turned on while you’re listening to advice from industry leaders and experts. Ask yourself: is the information relevant, and is it helpful to our current situation?
We need to be vigilant to avoid falling into the trap of cargo cult growth. The allure of emulating success is strong, and it’s easy to get carried away with implementing strategies and tactics that have worked for others.
But there’s more to growth than simply mimicking what’s worked for others. Successful strategies are born from a deep understanding of our customers, our market, and our unique value proposition. Growth should be a thoughtful, deliberate process, and not just the blind application of someone else’s playbook.