There is this magical moment that happens when a startup finally puts the key components together to build a successful business.  After months or years of iterating and pivoting, they finally have the right product for the right market at the right price.  At this point, the company has to shift gears and change their mindset a little.  They need to stop looking for gold and start mining as fast as possible.  My friend Chris Moody, President/COO at Gnip, refers to this as the execution phase of a business and there is no better example of execution in our current portfolio than the team at Gnip.

After 2.5 years of product development and varying business approaches, Gnip found their magic moment about a year and half ago.  Since that time they have been heads down executing and the results have been incredible.

Today Gnip announced an exclusive partnership with Tumblr.  This monumental partnership will give Gnip’s customers full coverage of an amazing source of social data that has never been available.  With 50 million new posts per day and 15 billion page views per month, Tumblr offers a huge new data stream for companies to analyze and use to drive business decisions.  The fact that businesses will be able to receive this data via the same reliable and scalable Gnip infrastructure that currently delivers Twitter and other important data sources is a major win for the ever growing social data economy.

The Tumblr partnership is the kind of announcement that companies plan their entire year around.  However, in Gnip’s case, it is just the latest activity in an impressive series of events that shows the Gnip team knows how to get shit done.  It is only April and Gnip has already done the following in 2012:

• In January, Gnip announced an exclusive partnership with Automattic to provide firehose streams of WordPress.com and WordPress.org data to the enterprise.  This partnership increased the amount of real-time blog data available for business analysis by 70% overnight.
• In February, Gnip announced a premium partnership with Disqus.  Disqus is the largest third party commenting system in the world (I use it on my blog) and the data offers tons of valuable insights to drive lots of cool business use cases.   The Gnip/Disqus partnership makes this comment data available in full firehose coverage form to businesses for the first time ever.
• Also in February, Gnip released the first ever commercial Twitter historical product.   Gnip’s 30-day replay product allows their customers to go back and replay Twitter history.  As the old saying goes, hindsight is 20/20, and Gnip’s replay product allows companies to replay the entire Twitter stream for a full 30 days to look for things they might have missed.  This product was a monumental engineering feat and a huge portion of Gnip’s customers have already taken advantage of this product in just the first two months after its release.
• In March, Gnip announced Big Boulder, the first ever conference dedicated to social data.  Take a look at the list of speakers – it will blow your mind.
• Just last week Gnip announced that they added the largest microblogging service in China to their Enterprise Data Collector offering.  Sina Weibo has over 300 million members;  brands across the world are very interested in the conversations happening on this enormous platform.  Gnip continues to push to increase the number of international data sources in their offerings and Sina Weibo represents a huge addition to their portfolio.

Okay, so the Gnip team is getting stuff done, but at what price?  They must be cracking the whip pretty hard and creating a real sweat shop, right?  Wrong.  In spite of growing their number of employees by 300% in 2011, Gnip was just named The Best Place To Work in Boulder.  Not the best startup, the best company.  And, the best news of all?  They are hiring!

I heard a fascinating one-liner the other day that I had knee jerk negative reaction to but when I thought about it more thought was deeply insightful, especially in the context of big established companies vs. new entrepreneurial companies.

A CEO of a very large, successful company said “execution is an order of magnitude easier than opportunity.” In the context of young startups, I often feel exactly the opposite. Opportunity is everywhere, but execution in a bitch.

But then I thought about this a little. For a big company that dominates a market, it’s totally focused on execution. The company is built for execution and, assuming it is built well, just cranks things out. What it cranks out might be inspiring, or it might not be, but it’ll keep cranking things out.

For these companies, finding the new opportunity is really difficult. The company is tuned to defend its turf, not go find new turf. Execution is all about defending market position, maximizing profit, expanding market share in existing markets, and allocating resources. In a few extraordinary cases, this activity is massively inspired, usually around companies that love their products (Apple) or their customers (Virgin). So – for most of these companies, “execution” is easy relative to finding the new opportunities. And many of these large companies don’t focus on finding the next opportunity, or expanding their existing opportunity, until their business hits major headwinds, is in decline, or is massively disrupted. I give you Borders, B&N, and Blockbuster as examples here – awesome at execution until what they did became irrelevant and then it was too late for them to do anything about it (other than maybe B&N, who might pull off their transition.)

In contrast, startups are totally focused on the new opportunity. Assuming they find it, and it’s a big one, execution becomes the main challenge in front of them. Their activity is all about scaling up the organization, hiring people like crazy, building a culture of shipping great product consistently, reacting effectively to early customer feedback, and continuing to evolve their products to meet the new massive opportunity they are going after.

From the eyes of a big company CEO, finding the opportunity is hard. From the eyes of a startup CEO, the opportunity is everything – execution is hard.

My insight is simple: “context matters immensely.” As young companies grow rapidly, they have to focus on becoming execution machines and recognize that at some point they’ll start struggling with identifying the next evolution of their opportunity space. Assuming the opportunity they are going after is massive, this won’t matter for a while. But the execution dynamics will. And when you find yourself executing well, dominating your market segment, and growing quickly, you’ve got to make sure you keep focusing on expanding the opportunity, especially since that’s going to get harder as you get bigger.