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I agree with the sentiment, but in real life it doesn't work that way. You get the pots from your parent's house because you don't have pots and you have 10k i
by 3pt14159 15y ago
I agree with the sentiment, but in real life it doesn't work that way.
You get the pots from your parent's house because you don't have pots and you have 10k in the bank. Getting those pots extends your runway by 5%. I do agree with the idea that certain services should be bought, but if anyone really, really believed what they were doing was worth $1000 per hour the first thing they would do would be to hire a do-everything-secretary that would make coffee and lunches, would send emails and do laundry. But people don't do that, what people do is maximize the chance that they can take off.
- amirmc 15y agoI think 'runway extension' is an interesting/better way of treating the early stages. Using fictitious 'hourly rates' to make decisions seems strange and ultimately counter-productive. Only if you've got a clear way of making money (and customers waiting) can I see it making sense. In general, I'm sure there are plenty of successful people for whom this worked out but there are probably as many unsuccessful people (that we don't hear from) who ended up spending cash they didn't need to. Cashflow matters.
- brlewis 15y agoI like the runway angle. It's consistent with Fred Wilson's advice about the importance of keeping enough cash in the bank: http://www.avc.com/a_vc/2010/08/what-a-ceo-does.html http://www.avc.com/a_vc/2010/08/what-a-ceo-does.html
- bjornsing 15y agoAgree completely. Optimizing for some fictitious hourly rate doesn't sound very meaningful. Personally I try to optimize for "overall lifetime impact". Sometimes that means picking up pots from my parent's house. Most often it means going without pots. I guess you can also optimize for "likelihood of success in current venture" or even "present value of future earnings" and get similar results.