When I built my first company in the late-90s the prevalent mantra was:
Get as many eyeballs (the 90’s lingo for users) as quickly as possible.
We didn’t worry about making money all that much or even having figured out a business model – as the Internet back then was perceived as a land grab.
Alas, the land was often worth nothing.
I find it interesting to see that history seems to repeat itself…
Fueled by a (very) few prominent businesses which are destined to scale at an exponential rate (or as the new word du jour has it: blitzscale), entrepreneurs around the globe seem to believe that it is a valid strategy to focus on building a product without a business model or path to profitability.
Sadly the outcome of this strategy is nearly always a failed startup and burned out founders.
It might sound distinctly old school – but figuring out how to make money and focus on getting to positive cash flow is (for the vast majority of companies) by far the best strategy. Praying for a VC who will fund your company until you are “too big to fail” is not.
Why not spend some cycles on refining your business model, pricing, customer acquisition strategy and cash flow planning?
I know – doesn’t sound sexy. But building a growing company which is kicking it for years to come is surely sexy as hell.
Because you want your company to last over the long haul. You need to build a company which lasts. Not your “nine days’ wonder” but something which endures the trials of time.
There is a lot which goes into building a long lasting company. In the initial stages, all startups are messy, chaotic and disorganized. As your organization grows up, you are faced with decisions all along the way.
And you can choose to stay scrappy, wild and chaotic or you can build a full-fledged, well-governed company. The former will eventually die as its structure is just not built for the test of time, the latter oftentimes becomes slow and bureaucratic.
Andy Grove, co-founder of Intel, once said:
“Only the paranoid survive.”
I believe that to be fundamentally true – in the beginning, you are paranoid out of necessity. Once some success comes, some money flows – all too many companies lose their edge. And once you lost it, it’s incredibly hard to get back.
The art is to build the full-fledged, well-governed company without losing your sense of urgency.
What do you think? Would you agree that monetization should come before anything else? Let me know in the comments below.