January 29, 2013

It’s a great scene in many movies.  There is a climactic moment when it’s clear that the odds are badly stacked against the heroes.  But it’s also clear that there is nowhere to run, or no time to avoid a conflict. It’s now or never, and a glorious battle ensues with a dramatic outcome, win or lose.

There is nothing like really having your back to the wall to focus a startup’s efforts.  I actually find that the founders that we work with that perform the best tend to be extremely goal and milestone driven at every stage of the company, and try to instill that sense of urgency pretty regularly with their team.  They push themselves to not wait for mediocre results to turn around, and they think creatively about how to try cheap and quick things that might create a real inflection point that could put a company on a much more attractive path.

I find that cash in the bank and runway tend to be enemies of focus.  IT’s easy to relax and lose the entrepreneurial impatience that allowed the company to do seemingly super-human things early on with little or no resources.  But that said, raising a bit more if possible, extending runway, and buying time are all pretty prudent things to do.

Remember though that you have your back to the wall until the day you have a steady and reliable stream of cash that sustains your business.  Users, press mentions, awards, hype, fame, doesn’t change that.  This goes for employees as well as founders.  Yes, startups have been the shiny new thing for a while, and you can pat yourself on the back for joining a hot company with hot investors.

But there are graveyards full to hot companies, and billions of lost dollars flushed down the drain by hot investors.  Our backs are all against the wall.

  • jonathanjaeger

    As long as we don’t have our hands tied behind our backs.. unless you’re Jackie Chan, than you still have a chance. But startups are not always ‘Rumble in the Bronx.’

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  • Lee Hower
     - 1 day ago
    @epaley doesn't make sense when lower unemp % being driven mostly by ppl dropping out of labor force, not getting new jobs
  • Lee Hower
     - 1 day ago
    @epaley in June 223K new jobs, but 432K people dropped out of labor force… participation fell to lowest in nearly 40 yrs
  • Lee Hower
     - 1 day ago
    @epaley but some have suggested US is moving to a lower equilibrium for full employment, e.g. "normal" unemp % is now lower than historical
  • Lee Hower
     - 1 day ago
    @epaley yes net job creation is obviously good… monthly avg in 2015 slower than 2014, but still a bit over 200k/mo thus far thru 1H