Both Sides of the Table

OCTOBER 12, 2010

Even if you don’t have “direct&# sales I would tell you that “everything is a sale&# including fund raising, hiring, getting press and doing business development. One of the biggest mistakes I see early-stage startups making is hiring “seasoned&# sales professionals or hiring people too senior, too early.

Hiring 346

Hiring Sales Startup Early Stage 346

Startup Professionals Musings

MAY 22, 2020

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? Any outside advisors or board members available for discussion?

Technical Review 436

Technical Review Due Diligence Sweat Equity Burn Rate 436

Steve Blank

FEBRUARY 11, 2010

Six is a Proxy for Burn Rate. Later I realized six salespeople without revenue to match was a proxy for an out of control burn rate that now had the boards serious attention. With that initial sales “success” they began to hire and staff the sales department per the ”plan.” How many salespeople do you have?”

Burn Rate 252

Burn Rate Silicon Valley Marketing Boston 252

Steve Blank

SEPTEMBER 3, 2014

Speed keeps cash burn rate down while allowing you to converge on a repeatable and scalable business model. And that he could identify the resources needed, (outsourced contract developers who could build it for him) and he would hire a partner to do so. In a startup building MVP’s is what turns theory into practice.

Cofounder 336

Cofounder Founder Technical Cofounder Coder 336

Steve Blank

SEPTEMBER 5, 2018

He just hired Meg Whitman. Startups wrote business plans, generated expansive 5-year forecasts and executed (hired, spent and built) to the plan. Startups with huge burn rates – building leases, staff, PR and advertising – ran out of money. the ex-CEO of HP and eBay, as CEO of NewTV. Then one day it was over.

Lean 335

Lean Burn Rate Startup IPO 335

Both Sides of the Table

NOVEMBER 3, 2009

How many people will you hire in the first 24 months and in which sequence. Don’t know the running rate for engineers? I won’t need to hire many engineers or customer support staff. Too aggressive about the rate of customer adoption? You might then slow down your burn rate or raise more money.

Business Plan 334

Business Plan AJAX Venture Capital Technical Review 334

Steve Blank

FEBRUARY 26, 2013

90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving, and with 120 people and a huge burn rate, we’re running out of money and about to crash. We hired everyone according to our plan. This can’t be happening to me. Stage 2: Deny any of it was your fault.

Redemption 333

Redemption Cofounder Silicon Valley Burn Rate 333

Steve Blank

NOVEMBER 2, 2009

The key contributors to an out-of-control burn rate is 1) hiring a sales force too early, 2) turning on the demand creation activities too early, 3) developing something other than the minimum feature set for first customer ship. And most startup code and features end up on the floor as customers never really wanted them.

Lean 263

Lean Silicon Valley Startup RSS 263

YoungUpstarts

AUGUST 31, 2019

Keep Cash Burn Low. Every startup, no matter how small or large, should have a clear understanding of its burn rate. The first step is to calculate your burn rate. The second step is to lower your burn rate and effectively increase the longevity of your startup. Hire the Right People.

Burn Rate 176

Burn Rate Startup Lean Early Stage 176

Startup Professionals Musings

FEBRUARY 18, 2023

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? Any outside advisors or board members available for discussion?

Sweat Equity 207

Sweat Equity Burn Rate Technical Review Intellectual Property 207

Startup Professionals Musings

SEPTEMBER 14, 2016

Investors check your burn rate to assess your efficiency, and project your remaining runway before you run out of money and into a brick wall. It doesn’t take a financial genius to recognize that you need to keep your burn rate low. Cash flow out equates to burn rate, and the runway depends on your reserves.

Burn Rate 120

Burn Rate Hockey Stick Startup Salary 120

Steve Blank

FEBRUARY 26, 2013

90 days later, I found out our games are terrible, no one is buying them, our best engineers started leaving, and with 120 people and a huge burn rate, we’re running out of money and about to crash. We hired everyone according to our plan. This can’t be happening to me. Stage 2: Deny any of it was your fault.

Redemption 225

Redemption Cofounder Silicon Valley Burn Rate 225

Both Sides of the Table

JULY 13, 2013

And for every time I’ve felt hugely stressed that our burn rate was getting too high, and I didn’t know who else was going to fund the company, and I’m all in on this company, right?” Because I’m going to say no to you, and the guys you want to hire from Facebook are going to say no to you.

Cofounder 337

Cofounder Technical Cofounder Startup San Diego 337

VC Cafe

JULY 26, 2020

In fact, they were screaming at them to dramatically reduce their burn rates. Angel investment, which was small to start with, disappeared, and most corporate VCs shut down. VC’s were no longer insisting that startups spend faster, and “swing for the fences”. It was a nuclear winter for startup capital.”

Lean 214

Lean Seed Capital Startup Burn Rate 214

Both Sides of the Table

DECEMBER 16, 2009

They had wasted a lot of money because they had raised a lot of money and therefore hired a large staff. I just knew that our sales sucked wind and we were burning through tons of cash. I advocated LOUDLY at the board that we needed to cut our burn rate. A new and experiened CEO was brought in and cleared house.

Entrepreneur 306

Entrepreneur Burn Rate Cofounder Sales 306

Transformify

AUGUST 27, 2017

All of the above is true, but it is also true that many startups have failed because they hired too early, too fast, or fired too late. Many of the points below can be found among the best hiring practices for startups and there is nothing wrong with them in general. Then the hiring begins. Hire full-time employees.

Hiring 64

Hiring Software Review Burn Rate Startup 64

Feld Thoughts

NOVEMBER 18, 2013

They close on the $750k, hire a buddy or two, buy some Macs, and get to work. Things start to get a little fuzzy in terms of priorities, but not to fret, the new office is coming along really well with all of the hiring! At month six, one of the early hires leaves, a developer who turns out wasn’t a good fit.

Burn Rate 153

Burn Rate Equity Software Review Early Stage 153

Steve Blank

APRIL 20, 2009

In ten years, from the early 1950′s to the early 1960′s, the valley went through a hiring frenzy as jobs in microwave companies went from 700 to 7,000. But in fact, most startups need to keep their burn rate low more [.] to do that.

Silicon Valley 302

Silicon Valley RSS San Francisco Technical Review 302

Steve Blank

SEPTEMBER 7, 2009

The rest of the organization (product development, marketing, support) has been burning cash, all according to plan, expecting Sales to make its numbers. Blame it On Marketing In the next 3-6 months, a new VP of Sales is hired. Without the revenue to match its expenses, the company is in now danger of running out of money.

Customer Development 233

Customer Development Developer Customer Silicon Valley 233

The Next Web

DECEMBER 2, 2013

Therefore, if you want to bring an MVP ( Minimum Viable Product ) to market, Werdelin approximates that you’ll need $50,000 to $250,000 , depending on the skill sets of the developers and designers you hire. Of course, if you’re hiring an agency, you’re probably looking at 1.5 4) WhatsApp. million plus overhead. All the grains of salt.

Cost 168

Cost San Francisco New York City Ruby 168

YoungUpstarts

MAY 19, 2016

Use burn rate as an example. If you don’t understand how much money your company is burning through each month, how can you expect to intelligently talk about your fiscal health? To become part of the surviving half, use these methods to ensure your startup’s structure stands strong. Read your books from cover to cover.

Technical Review 124

Technical Review Burn Rate IP Intellectual Property 124

YoungUpstarts

JUNE 20, 2019

Series B: Hiring and Developing Managers. All startups find themselves struggle with hiring to meet growing demand, leaving most startups scrambling to onboard hires. When startups make new hires, it’s not uncommon to then promote the longest-tenured engineer, tasking them with onboarding staff.

Technical Cofounder 113

Technical Cofounder Burn Rate Seed Stage Cofounder 113

Startup Professionals Musings

APRIL 10, 2016

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? Any outside advisors or board members available for discussion?

Sweat Equity 120

Sweat Equity Burn Rate Technical Review Intellectual Property 120

Startup Professionals Musings

APRIL 8, 2015

From my perspective as an investor, I recommend that every founder needs to know the answers to these questions, be open and honest in answering them thoughtfully, and without making excuses: What is the current runway and burn rate? Any outside advisors or board members available for discussion?

Technical Review 120

Technical Review Due Diligence Sweat Equity Burn Rate 120

YoungUpstarts

AUGUST 19, 2016

While you absolutely need to keep an eye on earnings and burn rate, human capital is ultimately the fuel that makes the machine run. Depending on your startup’s needs, it can be a toss-up on whether to hire for attitude or skill. Others may need a high-level new hire to start things off with a bang.

Startup 100

Startup Burn Rate Cofounder Salary 100

Steve Blank

MARCH 17, 2020

The questions every startup or small business CEO needs to ask now are: What’s my Burn Rate and Runway? Burn Rate and Runway. To answer the first question, take stock of your current gross burn rate i.e. how much cash are you spending each month. What does your new business model look like? How do you know?

Burn Rate 436

Burn Rate Startup Valuation Sales Cycle 436

crowdSPRING Blog

OCTOBER 24, 2014

What is the Right Burn Rate at a Startup Company? | Hire the Right Type of VP Marketing ?Or Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics | by @ttunguz – crowdspring.co/1sRVdjm. Why You Should Find Product-Market Fit Before Sniffing Around For Venture Money | Co.Labs – crowdspring.co/1sRVsv5.

Social Media 95

Social Media Small Business Design Media 95

techcrunch.com

FEBRUARY 26, 2013

He knows how to advise entrepreneurs on hiring/firing, running teams, managing funding, when/how to control burn rate, and making other tough management decisions in the real environment of startups. I often say I have a larger collection of personal mistakes than most people in the venture business.

Burn Rate 87

Burn Rate Hiring Engineer Entrepreneur 87

crowdSPRING Blog

OCTOBER 10, 2014

. “the people you fire are more important to your [company''s] culture than the people you hire.” Refocusing the Startup Burn Rate Debate | OpenView Blog – crowdspring.co/1n8paLq. 5 Ways to Hire the Best Talent for Your Startup Team – crowdspring.co/1ptyfds. ” – crowdspring.co/1slKVZ2.

Social Media 97

Social Media Small Business Design Media 97

Genuine VC

FEBRUARY 9, 2011

Start-ups hire ahead of growth (or at least predicted growth), which translate into a viable company, a healthy work environment, and future internal opportunities. What is the burn rate and how much cash is in the bank now?

Startup 146

Startup Burn Rate Technical Review Down Round 146

crowdSPRING Blog

SEPTEMBER 19, 2014

Are startup burn rates out of control? This Invaluable Lesson Will Keep You From Making Catastrophic Hiring Mistakes - crowdspring.co/XeV4JS. Hiring startup engineers? How Everything We Tell Ourselves About How Busy We Are Is A Lie | Fast Company – [link] crowdspring.co/1uH6HVo. 1wpHRKP.

Social Media 94

Social Media Small Business Design Media 94

Both Sides of the Table

MAY 2, 2015

For a well-funded seed company I have controversially recommended hiring a great office manager that doubles as an administrative assistant. This happens because many CEOs are passionate, market-driven people who are constantly trying to launch new products, win contracts, get press, hire staff and woo VCs. Hire a great CFO.

Operations 150

Operations Metrics Early Stage Non-Compete 150

Mucker Lab

MAY 28, 2020

Hire the wrong people. Bad hiring decisions are often a symptom of premature scaling. Why hire a sales team when you have nothing to sell yet? That sounds absurd, but founders convince themselves that they’ve hired the right people at the right moment. Be trigger shy about hiring. Honestly, we don’t know.”?

Startup 78

Startup Cofounder Burn Rate Technical Review 78

crowdSPRING Blog

DECEMBER 12, 2014

Don’t Get Burned by Your Burn Rate – crowdspring.co/159KKrk. Holiday Hiring By the Numbers (Infographic) – crowdspring.co/1CzjykC. When You Give Your Team a Goal, Make It a Range – crowdspring.co/1yINX9Z. 7 Simple Ways to Appreciate your Team (and Boost Performance) – crowdspring.co/1veUNVr.

Social Media 100

Social Media Small Business Design Media 100

This is going to be BIG.

MARCH 1, 2010

Even after we got funded, it took us three months to hire our first two developers at our prior companies—and I consider us pretty visible and well-networked. If anything, it should be *easier* to pull someone out of a bank in NYC than to pull someone out of Twitter or compete against them head to head on hiring.

New York City 115

New York City New York Startup Burn Rate 115

Startup Lessons Learned

MARCH 27, 2009

The full formula works like this: runway = cash on hand / burn rate # iterations = runway / speed of each iteration Very few successful companies ended up in the same exact business that the founders thought theyd be in (see Founders at Work for dozens of examples). Were talking PayPal -sized variations.

San Francisco 117

San Francisco Lean Continuous Deployment DC 117

Startup Professionals Musings

JUNE 27, 2022

Too often they are also hesitant, inexperienced, and fearful of hiring people or finding a mentor to be the partner they need. You know you should have been tracking the burn rate, or inventory requirements, or late receivables, but have found yourself totally distracted by a flock of emergency daily issues.

Burn Rate 329

Burn Rate Differentiation Salary Entrepreneur 329