[elbasti]

The logic is roughly as follows, for a consumer product with a short sales cycle:

- Iff your market is very large, and

- Iff you have well-known customer acquisition channels that are deep, with well known customer acquisition costs

- THEN you should be able to grow 20% MoM simply by spending 20% more on customer acquisition every month.

To grow 20% MoM means you're grow 9x over the course of a year...and when you think about things things this way it makes sense why a seed round of VC is ~$1MM and a series A is ~$10MM.

So why limit oneself to 20% monthly growth? Well, because it takes time to learn how to deal with the scale.

More realistically, what (should) happen is that you have SOME known channel that will grow you say, 5x, if you spend 20% more on acquisition every month. So the next five months are spent doing two things in parallel: learning how to deal with the new scale, and desperately looking for a new channel. Fail at either and you die. Succeed at both and you've maybe built a very valuable business.