Time, Pressure, Resources – Your Start-Up is Like a Pearl…

If you were involved in the Internet start-up game during the late 90′s, early 2000′s, at the height of the Internet craze when the bubble was just beginning to burst, you’ll appreciate this analogy.

During this period, Investors and founders at start-ups, fell victim to the belief (or at least their actions indicated they did) that by significantly increasing resources and pressure on opportunities you could significantly reduce the time necessary to gain customers, generate revenues and ultimately succeed. I admit, I probably fell victim to this mentality myself (perhaps to a lesser degree than some). While this philosophy may work in some very rare cases (where there’s tremendous demand pressure), the majority of time it just doesn’t pan out.

The lesson we learned? A simple one. The development of a successful start-up requires similar ingredients to that of a pearl or diamond – time, pressure and resources. If you try and increase production of diamonds or pearls by increasing resources and pressure, while reducing time, what do you get? Coal or packed sand. When you follow this same model when trying to build a business, the results will probably be similar.

For an early stage start-up, time is not generally a component you can replace with resources and/or pressure. More marketing, more manpower, more infrastructure. These things will do little if you haven’t already proven you can realistically scale. You need time to figure things out, time to evolve, time for the market to become familiar with what you do, time for adoption, and so on. There are certainly exceptions (MySpace, YouTube, etc.) , and time is relative, but in general the rule applies more often than not.

So how do you use this lesson and make sure don’t fall victim to repeat the same mistakes we did the first time around. Start by recognizing your venture will, in all liklihood, take time to catch on, and time to evolve. Plan and budget for that time. Operate extremely lean. Raise (if needed) enough cash to last at least 18 months. And have a contigency plan, if after 18 months you still need more time (assuming you still strongly believe in the vision).

Believe it or not, many businesses take more than 2-3 years to evolve and really take root. I know, that may seem like an eternity in the world of the Internet, but remember succesful entrepreneur’s are patient, persistent, committed, passionate and understand the element of time.




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