A start-up is in a race between credibility and cash-flow. If it takes longer than forecast to build credibility then it can get in trouble. One of the keys of course is to get the set up costs and working capital projections right. Often, startups are too optimistic about when credibility (path = awareness, trial, engagement and sales) will come and they under estimate the cost side. So it’s a double whammy. Not enough revenue and higher costs.
That’s why I have a healthy respect for people who take risks and don’t just shout instructions from the stands, but they get in the game. They put their money and sweat equity on the table as well as attract investors in order to bet on themselves.
This post was inspired by the young people who started www.f1rst.com (first with a 1 not an i)
Good luck guys on your journey of many sleepless nights and days of joy. Last night you made a good f1rst impression.
21 April, 2014, 11:03 pm
For some reason.. I like this article ;-)