Most companies are constantly focused on growth. It makes sense at first. You’re either growing or dying right?

But to grow means you need more resources and maybe more funding or sales.  Ironically, most companies go belly-up despite strong growth.

What kills them is the pace of the growth. Twitter has grown so fast it’s had problems with its engineering keeping up with the adoption rate. Good problems to have no doubt but problems nonetheless.

Enter 37Signals and their obtuse approach to business. Inc.com recently ran an article by their founder, Jason Fried, and his strategy for pricing a new iPod app at almost 10X the normal app price ($9.99 vs. $.99).

So far, we’ve sold nearly 2,000 copies of Draft. That’s about $20,000 in revenue. We are much happier with $20,000 in revenue from 2,000 customers than $20,000 in revenue from 10,000 or 20,000 customers. Given our current resources and team, we can happily serve 2,000 Draft customers, plus all our other customers.

Same gross revenue but dramatically less customer service costs. Smart growth not fast growth. (Note: The only way 37Signals can do things this way is that they only have one investor – Jeff Bezos, from Amazon)

As the picture shows, you can have a big pie with a big customer service expense. Or you can have a smaller pie with a lot less customer service headaches. Same profitability at the end of the day but the circle on the right is a lot easier to manage in a startup environment.

There’s a direct correlation between the quality of a customer service experience and the rate of growth at that company. Given the power of social media, companies have to be super careful to get this ratio correct. If not, word spreads too fast (especially within a tech community) and it becomes even harder to sell to the Early Majority with bad word of mouth out front.

In an early-stage (or any stage) company, don’t be afraid as the marketing lead to speak up and bring up the importance of letting customer service keep up. These people are often times the most important brand ambassadors, despite their salaries not necessarily reflecting their contributions.