• Matthew Lerner

Constrained vs. Unconstrained Domains

How Tripledot Studios hit $1.4B by doing the opposite of what I preach

“Matt, I cannot hire fast enough.”

That doesn’t sound like a threat, but this conversation shook me.

I was catching up with my old friend Akin Babayigit, whom I hadn’t seen since before lockdown. In those two years, he explained, he’d quit his job, co-founded Tripledot Studios, and grew it to nine-figures ARR. In two years!

I asked the obvious question: “Wow! How’d you manage to do that?” (And here comes the scary bit, for me at-least.)

He said “It wasn’t any one thing Matt. We had to do 100 things, but do them each 1% better.”

I panicked because I write this newsletter, and I keep telling everyone that “90% of your growth will come from 10% of the stuff you try.” I tell founders to focus on one or two high-leverage things. But Akin's doing a hundred little things, and clearly it’s working. Have I been spreading irresponsible lies? Leading my readers astray? I had to figure out what was going on!

“The thing that doesn’t fit is the thing that’s most interesting.” Richard Feynman

Akin's challenge pushed me to reconsider my entire approach. That led me to think about Constrained vs. Unconstrained domains, and whether a startup is competing in a “game of inches” or a “game of miles."

A Game of Inches or a Game of Miles?

This is probably a good time for me to tell you a bit more about Akin. He spent his career in mobile gaming, working for, investing in, advising and founding companies. His current company, Tripledot Studios, makes the top-ranked Solitaire game in the app store.

Remember, app stores rank games with a tight mix of popularity, reviews and relevance. The top-ranked game might only be slightly better than #2 on a handful of factors, but in terms of revenue, the difference is huge. Like SEO, ranking #1 is a "winner-take-almost-all” proposition.

So what’s the best strategy for you? My 90/10 rule, or doing 100 things each 1% better? (Because you can’t do both!) It depends on the sort of domain you’re operating in.

Constrained vs. Unconstrained Domains

Constrained Domains, like app stores, are tightly regulated, all actions are governed by strict rules to limit the scope of competition. Think of professional cycling, chess, ballroom dance, or highly regulated industries like pharma or financial services. In these domains, everyone is required to follow the same rules, so they try to eke out small advantages by doing 100 things each 1% better. That’s how you win the Tour de France, or rank #1 for Solitaire on the app store.

Unconstrained Domains are wide-open, you can do almost anything. (Imagine joining the Tour de France on a motorcycle). This includes music, biology, engineering, writing, painting, and most startups. Because unconstrained domains have boundless affordances and few constraints, it’s possible to dream up something completely novel and hugely successful, like the first big social network, the first smart phone, or the song Despacito.

Most startups operate in unconstrained domains, which means they can invent a business that taps into a huge unforeseen and unmet need. If you’re the first one to do that well, the upside is massive.

Winning a Game of Inches

Because Akin’s company operates in a highly constrained domain, he follows a strict set of rules. If he can’t find a loophole, he just needs to remain ever so slightly ahead of #2. So the winning strategy in a tightly constrained domain is to find the right 100 things and do each one 1% better. It’s all about optimisation.

But most startups are not playing a “game of inches." They operate in unconstrained domains with many affordances and few constraints.

Optimise vs. Exploit

In a constrained domain, you need to optimise performance within those constraints, but in an unconstrained domain, you need to uncover new affordances and exploit them. You’ll find one or two, or maybe three levers, and milk the shit out of them and ignore everything else. You move fast and open up an early lead.

These are opposite strategies that require opposite mindsets, opposite strategies and opposite personalities.

Right now, are you operating in a constrained or an unconstrained domain? That dictates your approach.

  • Are you hiring optimisers who perfect every detail? Or maximisers who are fast, creative and fearless?

  • Are you rewarding perfect details? Or are you rewarding speed and chutzpah?

  • Are you trying to do 100 things slightly better? Or are you trying to find the one thing?

Often domains start as unconstrained (e.g. SEO or Crypto) and become more constrained as they mature. And sometimes constrained domains get “disrupted” by upstarts who operate outside of those constraints (Like Wise, Habito, Spotify, AirBnB, and Uber). If you're in a constrained domain, can you find a loophole? Or disrupt it from outside?

Simple next step

What kind of business are you in? Will you win by inches or miles?

If you’re in a constrained domain, list out your 100 things, hire the best people, and get to work. (Or look for a loophole). If you’re in an unconstrained domain, find your one (or two) big levers and exploit the shit out of them.

And if you’re not sure, if you think it’s a mix of both… It’s not. Do the hard reckoning, decide which game you’re playing, and go all-in. Push your thinking and your team, culture and process to the right approach. Because it’s impossible for a small company to be both. Optimisers infuriate exploiters, and exploiters undermine optimisers.

Sincere thanks to Akin Babayigit for allowing me to share his story, and to Beth Carter and Dave McClure for feedback drafts of this post. And yes, Tripledot is still hiring like crazy if you're looking.

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