September 26, 2007

Stayin’ Alive

David Cohen made a great point in his webinar a couple of weeks back that is worth a second look.

“Most companies just don’t stay alive long enough to figure out what the heck they’re doing.  Don’t assume you know what you’re doing and go spend a bunch of money.  Spend as little money as you can over time so that you have longer to figure out what you’re doing wrong –  because you’re probably doing something wrong.

  • Have you raised enough money to last you through Version 1 (the version that usually flops) and Version 1.5 (the one that flops less and provides you the capital you need to stay alive until Version 2)?
  • Are you spending money like there won’t be a Version 1.5?  Will you run out before you get there?
  • Do you have a systematic method of gathering information from your customers that will tell you what Version 1.5 should look like?

One of the best ways for your company to stay alive is to be as frugal as humanly possible.  If possible, have your team work from home.  Trade services with lawyers, accountants and other service providers that are crucial to your startup.  Buy used office furniture and equipment.  Do everything you can to avoid spending money.

What else can you do to save money and keep on stayin’ alive?




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