why do we stray?

A recurring theme in venture circles these last few weeks has been "Back To Basics" with VC pundits boldly prognosticating about the current state of the markets, talking about the infamous Sequoia deck and trying not to make people wince as they lay their claim to how they saw all this coming (I’m not immune to this myself and offered what I hoped was some practical advice in a recent post).

All of this gets me thinking, however – why is it that companies got away from "the Basics" in the first place. Every time people think the rules have been rewritten and that somehow "this time will be different" they are wrong.  So if we take anything away from this current crisis, for me it should be a reminder that most successful businesses are built carefully, over several (if not many) years and require a steady and disciplined approach.  At the core if this process is being realistic about what you can accomplish in any given period of time and not letting costs get ahead of where you are in both your business cycle and access to capital (see my take on that from last year – all of which still holds true).

Building businesses is in large part about the basics – let’s not get too far away from them next time.

  • Dawn

    I've often wondered the same thing, Seth. Like the mentality that you don't need a business model when you start a company. To me, that's like building the Trump Tower without plumbing or wiring and then trying to cram them in later. Somehow.

    Monetization needs to be built into a company's DNA, or it's not a real company, if you ask me. Like Twitter…it reminds me of Pinocchio hoping to become a real boy. May take a miracle.

    I think this is a particularly bad problem in the tech world because techies are typically young. They haven't lived through enough cycles to understand that you need to be ready for the hard times. They're a bunch of fiddling grasshoppers compared to us food gathering ants.