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I wasn't intentionally trying to mischaracterize your statement, apologies if it seemed that way. My remark was too flippant and should have been backed up wit
by polyfractal 14y ago
I wasn't intentionally trying to mischaracterize your statement, apologies if it seemed that way. My remark was too flippant and should have been backed up with some reasoning.
I understand that in some cases (financial, healthcare, biotech, etc) there are heavy capital requirements, simply because of the area they operate in. There are also other cases where using a large pile of cash can push you ahead of the competition and secure the entire market.
But if I had to guess, I'd wager that many, many startups are not in this kind of situation. They aren't in a capital-heavy field, and burning down a big pile of cash isn't going to make them the industry leader and crush the competition. I think more startups could be served better by simply focusing on solid business fundamentals...and it amazes me that just now are startups realizing that. Hence my comment.
That said, I'm arm-chair quarterbacking here. So my opinion counts for about nothing :)
Edit: For what it's worth, I agreed with the article and was pleased with the "be profitable sooner" mentality that the current YC batch has.
- drusenko 14y agoIt's not just capital-intensive industries. Winner-take-all markets will be won by a company that focuses on expansion first, revenue second. Not all industries are like that. Social networks and payment networks, though, are examples of winner take all markets. That is why it makes sense to raise a lot of money and try to capture the dominant spot in the market before a competitor does so.