I often see two entrepreneurs executing on similar opportunities, but with two very different capital efficiencies. First, there's the aggressive one who spends money very quickly, building a large team, buying early growth through aggressive marketing and sales, and hoping for a large upround in the next financing round. Then, there's the bootstrapping entrepreneur who hires carefully (sometimes too little, too late), trying to get as much runway with the current money as possible and build a "real" business.
In other words, bootstrapped vs funded.
Boris makes some good points, though I feel he still glorifies the funded path a bit more than necessary (perhaps because he's himself an investor, and is therefore interested in there being more funded businesses). One essential point:
3 . Evaluate your market: is it winner-takes-it-all?
If you're targeting a winner-takes-it-all (or almost all) market, then focusing on saving money makes no sense. You'd be sacrificing market leadership. Think about it. Nobody remembers Ryze, or Spoke as early LinkedIn competitors. But if you're operating in e-commerce or other non winner-takes-it-all markets, then you don't have to be overly aggressive in the early stages. In this case, you can take your time to fine-tune your model before aggressively scaling up.
I'd turn this point around and say, unless your market/idea has a property, like winner-takes-all or an intrinsic huge-upfront-investment (e.g. Tesla or SpaceX - and by "huge" I don't mean "it'll take 12 months to build v1"), it makes little sense to take funding, with all its associated problems.
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