Comments on: Is your early stage business stretched? Good!

By: sethlevine

sethlevine — Fri, 19 Jun 2009 22:10:05 +0000

the post and comments refer to private, not public companies – of which iâve been involved with over 100 and based on that experience. that said, gmâs a poor example. they failed due to extremely poor management, lack of market vision and significant over-leverage. perhaps they would have benefitted from more of a culture of the type that is created when companies are forced to be careful with cash and make smarter decisions in order to surviveâ¦

By: Curmudgeon

Curmudgeon — Fri, 19 Jun 2009 21:30:43 +0000

You commentators are a bunch of sycophants. Show me the evidence to back up these assumptions. Anecdotal is not evidence. Why would cash-starved companies do better? Show me an example of a publicly traded company that has benefited from lack of cash. Start with GM as a classic example.

By: Nino

Nino — Wed, 17 Jun 2009 02:57:02 +0000

that's def. true

By: sethlevine

sethlevine — Tue, 16 Jun 2009 12:26:04 +0000

absolutely, jay. and building this diciplane early is important. just because your company is rolling in cash doesnât mean you should spend it all . . .

By: sethlevine

sethlevine — Tue, 16 Jun 2009 12:24:07 +0000

that necessity is the mother of invention is really right on the mark here. being forced to make decisions early on in a business about what to focus on, how to scale, what resources to add (âdo we need another engineer or should we hire a sales person â we canât afford bothâ) builds solid decision making that carries over even after you have a bit more breathing room.Â iâve rarely heard a company say âi wish i had spent more money!âÂ but often hear entrepreneurs say something to the effect of âi sure wish i had that $100k back to spend now that i understand more about my market/customersâ¦â like anything thereâs a balance (although not all entrepreneurs end up with that choice given funding availability, etc.).

By: Jay of Cheap Scrubs

Jay of Cheap Scrubs — Tue, 16 Jun 2009 06:36:22 +0000

Luke pointed it out, necessity is indeed the mother of all invention. With a short rope, you'll have to make sure that you maximize the use of every inch of it.

John, you cracked me up.. LOL.. Yeah, this posts makes me feel a LOT better too.

By: LukeG

LukeG — Tue, 16 Jun 2009 05:44:49 +0000

I've definitely gotten tougher and more resilient over the last 12 months, and I don't think it's something we'll lose if or when we're in a more comfortable position. This business makes you learn to roll with the punches (and start looking around suspiciously when one hasn't landed lately).

It seems like one of the dangers of being overfunded is the temptation to scale your company – particularly your sales & marketing teams – before you have a validated product and a demonstrably repeatable, scalable sales process. When you're relatively broke you're forced to iterate and get the product/market fit right, if only because you don't have money to try another approach (isn't necessity the mother of invention?). As Gabriel noted, though, this is not to say that you can't have *too* short of a runway to make it through enough iterations to reach a viable product.

By: Gabriel Gunderson

Gabriel Gunderson — Tue, 16 Jun 2009 04:03:47 +0000

I agree –so long as it doesn't prevent you from focusing. We see both sides of it.

By: John

John — Tue, 16 Jun 2009 03:14:53 +0000

Phew! That makes me feel better. Thanks.