Staying Scrappy

A learning mindset as the driver of innovation

I recently spoke at Stanford University's Entrepreneurial Thought Leaders series,  which features leaders and entrepreneurs in a variety of industries. They let me have free rein over what I spoke about, and after thinking about it, I decided to settle on the phrase, “Stay Scrappy." 

The term "scrappiness" came from my friend and Facebook engineering partner, Vijaye Raji. When we started working together, he made “scrappiness” our team value, and because of this, we built more than we ever could have imagined. 

As our products and teams evolve, we face new challenges and opportunities, and those who are most adaptable and focused on impact are the ones who will succeed. For entrepreneurs and teams working on new things, scrappiness is a critical component of achieving your goals, staying focused on your vision, identifying opportunities, and navigating setbacks as they arise.

In today's article, you can find the key points I addressed in my talk for ETL, discussing why scrappiness is important for entrepreneurs and how organizations can avoid the biggest scrappiness-killers (or what I like to call “the Four Horsemen of Anti-Scrappiness”). If you would like to listen to the full talk, or to the Q&A that followed, you can find them both here.

What Does It Mean to Be "Scrappy"?

The Cambridge Dictionary defines scrappy as "having a strong, determined character" and a willingness “to argue or fight for what you want”.  

To me, scrappiness is the ability to face challenges head-on and be resourceful, without letting the potential for failure stifle the potential for getting things done. Being scrappy means that even when you're faced with a roadblock or obstacle, you’re able to push through and make things happen—even when they seem daunting. 

In business, this can be difficult. We are faced with limited resources, tight budgets, and fierce competition. But the most successful teams and companies are those who adapt a mindset of experimentation. 

The Scrappy Sower

There's a story in the Bible called "the parable of the sower." It describes a man who sows seeds in various places: a path, where birds consume them; rocky ground, where there isn’t enough soil to grow; in the thorns, where competition kills them; and, finally, on good soil, where the seeds are able to grow and flourish.

Builders, entrepreneurs, and founders are like the sower in this story. Of course, it can be easy to say, “You should build on good soil,” but when you build something new, you don’t know where that good soil is. The process of iterating and testing helps you find the right ground for your idea to take root. I like to call this "scrappy A/B testing": finding a product-market fit through experimentation.

This is, of course, easier said than done. You can't just pay lip service to exploration if you want to strike gold. Scrappy sowing is accepting that sometimes things fail, learning from those failures, and growing in the process.

The Four Horsemen of Anti-Scrappiness

When it comes to building products that stick, scrappiness is what will set you apart from the competition. That said, there are a few things that can quickly kill the spirit of scrappiness:

1. Process

Let me start by saying this: process is not always a bad thing. Certain things require procedures and standardization in order to function properly, such as contracts, expense reports, and launches. But taken to an extreme, process can impede progress.

When I was at PayPal in 2002, we decided we needed an updated spec template after we were acquired by eBay. I was on the team that worked on it, and the final template ended up being 35 pages long. It required approval from over two dozen teams, from legal to customer service and everything in between. If any one team had a problem with your proposal, you would have to seek reapproval from all the other teams who had previously approved it after you had made changes. We called this "running the gauntlet." As thorough as the process was, it significantly slowed down our ability to build products—good or bad. We could no longer ship anything without sign-off from countless teams, and just the act of getting those approvals ate up time we could have been using to experiment and iterate. It got to the point where it took eighteen months, and specs with hundreds of pages, to get anything shipped. 

This is just one example of how the process can play against innovation. If you get bogged down in bureaucracy, you’ll never be able to move fast enough to succeed in a competitive marketplace.

2. Vetoes

One of the reasons the approval process at PayPal was such a hindrance was because it allowed anyone to say no, torpedoing the whole idea before it had a chance to get off the ground. Now, this isn't to say that consensus is a bad thing, either, but there’s no denying that consensus also has the potential to slow down progress.

I was once working peripherally on a project that, to me, seemed relatively straightforward from a decision-making perspective. I assumed most of the issues were technical. I was baffled by how long it was taking to move forward, until one of the executives working on it quipped, "The problem is, we didn't actually disagree and commit. We all just agreed never to commit."

On this project, it was easy to say no to something, but there was no clear path to a "yes." As a result, everyone was able to pocket-veto without ever finding a path they could commit to. 

Many companies are like this. It's important that organizations really think about who gets to say no and who gets to say yes to things. Deciding who has the final say—and who needs to get out of the way—is the key to making sure the approval process isn't causing more problems than it solves.

3. Institutional Memory

Everyone remembers the battles they've lost—oftentimes more clearly than the battles they've won—and organizations are no exception. Institutional memory can be a powerful thing, but it can also be a dangerous thing when it leads to a fear of risk-taking.

When I was first pitching the idea of building a marketplace at Facebook, people pointed to Beacon, a previous product, as well as a partnership for a marketplace tab—neither of which worked out. I was told multiple times, "No one wants to buy anything on Facebook." Early experiences taught us that there was no place for commerce. As it turned out, there was. 

Recollections of past moves can be helpful for avoiding future mistakes, but they can also hold companies back from taking risks and trying new things. It's important to strike a balance between learning from past failures and being paralyzed by them.

4. Failure

The last horseman of anti-scrappiness is failure. This one is especially interesting because despite how failure-friendly Silicon Valley is, as organizations, we still don't allow our teams to learn through failure. We'll say, "Well, the team failed—they must be the wrong people." When we aren't hitting the numbers we wanted, we assume we must be doing the wrong thing, rather than recognizing that occasional missteps are a natural part of making progress. This kind of thinking can prevent us from learning, adapting, and iterating. 

If we can't embrace failing well as part of the path to success, we end up making perfect into the enemy of the good. This perfectionism can stifle scrappiness and make it harder for innovation to thrive.

Scrappiness as a Culture

It's important to remember that when I talk about scrappiness, I'm not talking about some inborn trait that you either have or don't. I'm talking about a mindset that can be fostered among organizations, leaders, and teams. Scrappiness is a philosophy of rolling with the punches, adjusting quickly, and learning as you go. It's about testing and adapting, not just moving fast and breaking things. It's about using mistakes as learning opportunities, rather than failures while celebrating the small successes each time you get closer to your goal.

For a lot of us, finding product-market fit can feel like a black box, and it's easy to get caught up in the process without really knowing whether we're moving forward or backward. But by building a scrappy mindset, and viewing potential setbacks as potential opportunities, we can keep forward momentum on our side. 

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The scrappy mindset is crucial to success in any industry. It's not about having a perfect plan, nor is it about plowing forward with no thought given to why you’re doing what you’re doing. Being scrappy is about embracing failure as a natural part of the learning process and using it to improve. When organizations get bogged down in the process, fear of failure, or past experiences, they lose the ability to innovate and adapt. But by fostering a culture of scrappiness, where teams are encouraged to test, learn, and iterate, companies can embrace risk-taking and achieve great things.