Ambitious new things or save it?
the company is default alive, we can talk about ambitious new things they could do. If it’s default dead, we probably need to talk about how to save it. We know the current trajectory ends badly. How can they get off that trajectory?
Spending !== Growth
In practice there is surprisingly little connection between how much a startup spends and how fast it grows. When a startup grows fast, it’s usually because the product hits a nerve, in the sense of hitting some big need straight on. When a startup spends a lot, it’s usually because the product is expensive to develop or sell, or simply because they’re wasteful.
Beware of hiring too fast
how to avoid being default dead. That one is easy: don’t hire too fast. Hiring too fast is by far the biggest killer of startups that raise money.
Slow growth is not because of lack of staff
In fact the large staffs of successful startups are probably more the effect of growth than the cause. And partly because when founders have slow growth they don’t want to face what is usually the real reason: the product is not appealing enough.
Founder’s bias on hiring
But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderately appealing) the growth never comes.
On the path to default dead
But because they have high expenses and slow growth, they’re now unappealing to investors.