3 ms·
What does that even mean? How do you kill yourself with a bucket of money?
by tw1010 7y ago
What does that even mean? How do you kill yourself with a bucket of money?
- michaelmior 7y agoHire too many employees, build out too much capacity without a market that can provide the necessary demand, operating costs get too high, and you're done. Of course if the terms of investments and the discipline of the founders are combined able to regulate the growth rate, these things become less of a problem.
- blackflame7000 7y agoIf you expand too quickly then you might not have the sales to maintain the large growth. Then your profits from good markets go to propping up bad markets and before you know it you aren't making any money in any markets.
- Ididntdothis 7y agoYou can overspend on stuff. When the money runs out you have a business that can’t sustain itself. Uber is running that risk too.
- whatever_dude 7y agoIn the same way one kills a software development project by having too many developers: you feel like you need to put everyone to action immediately, so you end up with a mass of disjointed, barely functional code.
- mwfunk 7y agoGrow too fast and not judiciously. Expand rapidly, making assumptions about expenses and operations and revenue. Then a few months later, there were unexpected expenses, operations aren't going as smoothly as anticipated, and revenue is nonexistent. The buckets of money turns into buckets of debt (possibly actual debt, or maybe debt from the perspective of the investors). Then...not much you can do. Companies grow because they hope more growth == more revenue == more profits, but it can easily go south. Fast forward a few months or years and they're stuck spending tons of money just to keep everything going, owing tons of money, but not making any money.
- gwbas1c 7y agoBecause they scaled the business before they knew how to operate the business. Edit: In order to scale a business, the founders typically need to operate the business themselves at a much smaller scale. Once the founders prove out the business model, the next challenge is hiring people and teaching them how to do the job. The same thing happens again as the initial hires become managers or take up senior roles and transfer knowledge. Killing yourself with a bucket of money is basically hiring people to do jobs that you (a company) hasn't figured out how to do yet.
- thomasjudge 7y agoLose money on every sale and hope you'll make it up on volume (or more charitably, that at a certain scale profitability will emerge)
- astura 7y agoIf your business model is selling $50 bills for $40, it's not sustainable.