Startup Secret 52: Be pound wise and penny foolish

You can play the lottery and hope your cool tech company gets acquired, or you can dig in and actually devise a plan for making money.


"Forget about spending money."

--Chance Barnett, CEO, Crowdfunder

So much of a startup CEO's job is raising money, that it stands to reason that the CEO will also spend a lot of time worrying about spending it. Or not spending it.

It can tie you in knots, according the Chance Barnett, the CEO of a crowdfunding portal, Crowdfunder (see Chance on Reporters' Roundtable ). But in the early days of a company's existence, what you spend money on, or what deals you make to save it, do not tell the tale. Yes, running out of money is a real danger for startups, but if you focus on that, you end up thinking small thoughts making small plans. You need a different focus.

Chance says, "Just focus on acquiring a customer. And focus on making money from them at 30 days, at 60 days, and at 90 days. If you can do that, you have a business."

Try this: Look at your favorite new tech companies and try to figure out where their revenues are, and if they are repeatable. I did a little hot-or-not off the top of my head with Uber vs. Path , Box vs. Highlight , and Dollar Shave Club vs. Clik . Just thinking about the obvious revenue flows of these (or any) companies is a good set of mental push-ups for getting the day going if your job is thinking about startups -- your own or others.


Startup Secrets is based on personal interviews with people building companies, and from their blog posts and news stories. Subscribe to Startup Secrets on Twitter or come back to Rafe's Radar for new ones. See all the Startup Secrets.

 

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