

Charlie Songhurst – Lessons from Investing in 483 Companies - [Invest Like the Best, CLASSICS]
The 3 Vital Startup Growth Filters Every Founder Must Survive
Charlie Songhurst breaks down the startup journey into three critical stages that act as "filters" determining success or failure.
First, from pre-seed to seed, failure mostly comes from "failure to achieve labor productivity," meaning the team doesn't gel or produce output together effectively.
Second, moving from seed to Series A, the key failure is not finding product-market fit—a stage with high serendipity akin to prospecting for gold.
Third, beyond Series A, managing scalable growth becomes a challenge as founders must transition from direct influence to formal management, avoiding a collapse in productivity per person known as "managerial diseconomies of scale."
Finally, at later stages, success depends on institution building—establishing strong finance, legal, and HR systems—often clashing with founders' original entrepreneurial personalities.
This declining productivity curve per employee and the tough transition to formal management is a major cause of startup failure and a clear signal for founder coaching needs.
Key Startup Success Filters
- Startups fail at every stage due to distinct filters: team productivity, product-market fit, scaling management, and institution building.
- Managing declining labor productivity as teams grow is a crucial determinant between success and failure.
Managing Productivity Decline
- Declining productivity per person in scaling startups can be massive, sometimes destroying overall output.
- Great startups manage the organizational politics better, dampening internal conflicts to maintain high productivity.