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

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

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

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 155

Burn Rate Equity Software Review Early Stage 155

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

Both Sides of the Table

AUGUST 9, 2011

Companies raised too much money in 2005-08 and had high burn rates. We have the inability to hire engineering in Silicon Valley or brand sales people in NYC but the country still has very high structural long-term unemployment. tl;dr summary. VCs were very active in this period. So no new deals got done. My prognosis?

Stock 305

Stock Technical Review Marketing Greece 305

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

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

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 114

New York City New York Startup Burn Rate 114

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

Both Sides of the Table

MAY 9, 2011

Hire your co-founder. Involve them in fund raising, hiring, strategy, etc. Involve them in fund raising, hiring, strategy, etc. like how much burn rate), whether to sell the company, etc. So trust me when I tell you that you can hire incredibly talented people for 30% of your company. Vested over 4 years.

Cofounder 393

Cofounder Founder Vesting Founder Vesting 393

Steve Blank

NOVEMBER 18, 2010

Surprisingly we have never explicitly articulated or understood that what’s really happening when we hire a new VP or CEO in a startup is that the newly hired executive is implicitly pivoting (radically changing) some portion of the business model. We were changing the business model when we changed executives.

Burn Rate 252

Burn Rate Management Business Model Customer Development 252

Both Sides of the Table

MARCH 9, 2013

Should you increase your burn rate by adding 2 senior hires who will help you ship faster or sell more but then have less time for fund raising? This is especially true in startups where speed matters and where there is a need to constantly calibrate direction and where these decisions can have existential outcomes.

Cofounder 413

Cofounder Burn Rate Dilution Valuation 413

Startup Professionals Musings

DECEMBER 31, 2013

Too often they are also hesitant, inexperienced, and fearful of hiring people or 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 275

Burn Rate Entrepreneur Differentiation Salary 275

View from Seed

OCTOBER 15, 2014

Examples of housekeeping include the following list, though not every item will appear every time: Finance: Cash out date, burn rate, 409A valuation, cap table, common/preferred stock dashboard. Team: Hires, fires, departures, responsibility changes, major promotions, and your org chart.

Seed Stage 331

Seed Stage Cap Table Metrics Burn Rate 331

Startup Professionals Musings

NOVEMBER 2, 2012

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? They should be asking to speak to you if you are a potential investor or a superstar hire. Who is a real customer that I can talk to?

Due Diligence 244

Due Diligence Sweat Equity Burn Rate Intellectual Property 244

Startup Professionals Musings

SEPTEMBER 21, 2019

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 249

Burn Rate Entrepreneur Differentiation Salary 249

Startup Professionals Musings

MARCH 6, 2012

People hire people they know, so nurture your relationship with friends already active in startups. What's the monthly burn rate? Personalities are strong, and the hiring process for good ones is tougher than big corporations. Start networking. Here are some specific questions to ask: How much money is in the bank?

Silicon Valley 246

Silicon Valley Burn Rate Startup Stock Options 246

Up and Running

JULY 27, 2020

Your forecast will also help you figure out when it might be the right time to expand, buy a new piece of equipment, or hire more employees. You’ll understand your cash burn rate and runway which is a critical prediction of how long your cash will last. How to create a dynamic, more accurate cash flow forecast.

Forecast 83

Forecast Management Cash Position Software Review 83

Startup Professionals Musings

JANUARY 4, 2011

People hire people they know, so nurture your relationship with friends already active in startups. What's the monthly burn rate? Personalities are strong, and the hiring process for good ones is tougher than big corporations. Start networking. Here are some specific questions to ask: How much money is in the bank?

Silicon Valley 227

Silicon Valley Burn Rate Startup Stock Options 227

Startup Professionals Musings

NOVEMBER 28, 2012

Quick to hire and slow to fire. Hiring after one interview is like hopping a red-eye to Vegas to get married after one date. On the other end of the process, don’t hesitate to pull the trigger fast when a new hire isn’t working, but don’t forget to be human and follow all the steps. Do not delegate this task.

Entrepreneur 274

Entrepreneur Intellectual Property LLC Burn Rate 274

Startup Professionals Musings

JANUARY 7, 2014

Be quick to hire and slow to fire. Hiring after one interview is like hopping a red-eye to Vegas to get married after one date. On the other end of the process, don’t hesitate to pull the trigger fast when a new hire isn’t working, but don’t forget to be human and follow all the steps. Do not delegate this task.

Startup 265

Startup Intellectual Property LLC Burn Rate 265

Startup Professionals Musings

SEPTEMBER 29, 2018

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 223

Burn Rate Hockey Stick Startup Salary 223

Startup Professionals Musings

DECEMBER 16, 2013

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? They should be asking to speak to you if you are a potential investor or a superstar hire. Who is a real customer that I can talk to?

Due Diligence 253

Due Diligence Sweat Equity Intellectual Property Burn Rate 253

Startup Professionals Musings

SEPTEMBER 5, 2011

My advice to founders out there is to not volunteer too much, but be open and honest in the face of direct questions like the following: What is your burn rate and runway today? They should be asking to speak to you if you are a potential investor or a superstar hire. Who is a real customer that I can talk to?

Due Diligence 237

Due Diligence Sweat Equity Intellectual Property Entrepreneur 237