Strip Mall vs Skyscraper

Nathan Barry explains his philosophy on building businesses by comparing horizontal vs vertical expansion strategies, using real estate as an analogy.

Strip Mall Model (Horizontal Expansion)

• Quick money focus with multiple small ventures
• Examples of horizontal expansion:
  • Building small office spaces one at a time
  • Adding retail spaces incrementally
  • Creating multiple income streams (ebooks, membership sites, etc.)
• Characteristics:
  • Uses up available resources across multiple ventures
  • Each addition makes a little bit of money
  • Spreads focus across multiple projects

Skyscraper Model (Vertical Growth)

• Focus on building one significant venture
• Key aspects:
  • Pour all resources into a single project
  • Keep building upward on the same foundation
  • Continuous improvement of one core offering
• Example: ConvertKit
  • Nathan's attempt at building a "skyscraper"
  • Focused on email marketing platform
  • Continued vertical growth in same space

Learning Process

• Can't build perfect product immediately
• Business success requires mastering many small skills
• Early failures are necessary for skill development
• Need to learn fundamentals before attempting complex ventures

Business Model Evolution

• Start with basic model
• Look for ways to improve and expand core offering
• Add complementary services that enhance main product
• Example: ConvertKit Commerce
  • Added payment processing to email platform
  • Creates synergy with core business
  • Reduces customer churn
  • Improves overall business model