Not All Revenue Growth Is Created Equal — A Harvard Fellow's Framework for Spotting the Real Thing

**Rob Snyder** (0:02)
There's a founder in Europe, I know, who has the worst sales calls you've ever seen. He basically reads the GDPR regulation on the sales call for no reason, and customers are desperate to buy regardless.
So that's what you're looking for. You're looking for people who are trying to buy despite, not because of.

**Rachel Warren** (0:26)
That was Rob Snyder, Harvard Innovation Labs fellow and author of The Power of Pull, on what real demand actually looks like and why it has nothing to do with a great sales pitch. I'm Motley Fool analyst Rachel Warren.
Rob has spent years building startups and analyzing hundreds of others to understand why some products take off and others don't, even when the value proposition looks identical on paper. He joined me to talk about how investors can use his demand framework to spot the differences between genuine product market fit and growth that's being manufactured by an ever-expanding sales and marketing budget, and what the AI boom is revealing about which companies actually have it. We hope you enjoy.
Welcome back to Motley Fool Conversations. I'm Motley Fool analyst Rachel Warren. As investors, we're constantly looking for companies with durable long-term demand. When a business experiences explosive growth, Wall Street often assumes that they've cracked the market code. Well, our guest today argues that traditional economic models are somewhat broken when it comes to understanding why customers actually buy things, and in fact that relying on the wrong growth signals can lead investors into dangerous traps. Our guest is Rob Snyder, a serial startup founder, a former McKinsey consultant, an entrepreneur in residence and venture partner for early stage venture capital funds, and a fellow at the Harvard Innovation Labs. He has synthesized his years of building and analyzing hundreds of startups into his new book, The Power of Pull. Rob, welcome to the show.

**Rob Snyder** (1:52)
Thanks so much for having me.

**Rachel Warren** (1:54)
The financial world has spent many years treating consumer demand like a mathematical formula on a spreadsheet, but your book, really interesting, completely flips that assumption on its head. I'd love it if maybe to start off today, you could take us inside the core themes of The Power of Pull and explain what inspired you to write it.

**Rob Snyder** (2:12)
The theme is that I thought consumer demand worked just like you mentioned when I went and started my first company. I thought it was you provide clear value, clear ROI, you solve a problem and then you convince them to buy and they'll buy it.
That's how I started my first company and we just got punched in the face for a couple of years when nobody would buy our product. Then I got a phone call from a restaurant owner who said, Hey, I have no idea what you were trying to sell me, but here's where I need help. This is specifically where I'm focused right now.
If you can help, you're a tech guy, maybe you can figure something out. I will pay you to help me out there. So that's when I realized that buyers don't behave like I want them to behave. They don't behave in a way that made sense in my economic textbooks. They behave in a very different way. That's when my startup started to take off. We went zero to four million in revenue in two years, and I've since helped a bunch of other startups try to uncover, why do customers actually buy things? What's really behind demand? It turns out it's not quite as simple as saying, oh, they pick what gives them the most ROI or the most value or what solves their problem. It works a bit different from that.

**Rachel Warren** (3:26)
Maybe dig a bit more into this theory or model of demand and also maybe help our listeners understand the difference between pull versus push in this context. I think that that would be a great way to better understand how this model works in real life.

**Rob Snyder** (3:38)
What I found when I tried to go out and sell something that I thought the market should want, was that it felt like I was pushing people to buy. It felt like I was trying to convince them. I was initiating all of the force in the transaction. You could think of it as. And so when I would be on sales calls, for example, I'd be saying, don't you have this problem? Don't you want this value?
Then I would have to do all the following up. So think of that as push, seller convincing.
When it worked, it worked very differently than that. There's almost none of me pushing. I would get phone calls from people saying, hey, I heard about your product and I need to buy it. That is all pull. That is the buyer basically pulling the product out of my hands.