| It's amazing how much money is like time. If you have a ton of excess time, you are far less efficient and it simply takes you longer to complete relatively simple tasks. Having tons of money before you can prove product-market fit just leads to misallocated spending and inefficient uses of money (because people force themselves to spend to justify the amount of money they've raised.) This is the reason programs like YC & TechStars work - it doesn't take a ton of money to build an early product and prove your model works. Once the model works - then you should spend like crazy to scale - but because you've spent the time with very little money - you understand the value of each dollar and the positive affect of each additional dollar. Edit: For examples, check-out most of the startups that blew up in the late 90s. They raised a ton of money because they could, but it was spent on domain names, really expensive office space, executive talent, and building proprietary software for non-core functions. My favorite example is the story of the Industry Standard - Check out "Starving to Death on 200 Million" by James Ledbetter if you want to learn more. |