Growth5 Blog

Tuesday, March 16, 2010

Don't Be In a Hurry to Grow Your Startup Too Fast

In this Entrepreneur Thought Leader Lecture at Stanford University, Angel investor Ron Conway (over 500 investments) and fellow investor Mike Maples Jr. of Maples Investments discuss ways to stay competitive and make your money last.

Tip one: Don’t be in a hurry to grow your staff as fast as you might be tempted.

The short clip (3:36) embedded below and here, contains the following advice:
1. MM: "Companies that have low burn rates, buy themselves hugely better probabilities of getting lucky over time."

2. MM: "You've got to be willing to not be too formulaic about when do you turn over another card, you gotta be willing to really talk to people that you trust and get their sense of perspective about whether it's time to give up or time to be persistent. I don't think there's any other rule than keep the burn low."

3. RC: "A million bucks better last over a year, roughly... If you start with three people, at the end of year one you shouldn't be more than five or six, that's plenty. Companies are most productive when they're less than ten people."

4. MM: "One observation that complements low burn rates – having a customer development strategy in addition to a product development strategy... There's a really good book written by Steve Blank who started E.piphany, called The Four Steps to the Epiphany. The basic thesis of the book is that companies should do customer development in parallel to product development." And have milestones for both.

5. MM: "That's the brave new world of entrepreneurship: low burn experimentation done a lot, find out the winning answers, discard the losing answers, but don't scale until you know it works. Discover the business before you scale the business."

via VentureBeat's Entrepreneur Corner.
Thanks Grace!

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