May 31st, 2023 | By: Wil Schroter | Tags: Emotional Support
The most powerful asset a startup can have is simply enough time to operate.
The problem is, most of us don't have that asset — at all. In fact, the very nature of a startup is often fighting the few moments we have left until our startup runs out of money altogether. Since we're all so hyper-aware of what happens when we run out of time, let's talk about the opposite — what happens when we have lots of time to build our startup?
Our internal motto at Startups has implicitly been "Let's stick around long enough to build our dream." That meant constantly fighting to stay profitable so that we could have an unlimited runway. As we celebrate our 11th birthday, I'd like to reflect on what the asset of "unlimited time" has done for us.
We all operate on such a short timeline in the startup world that it's easy to overlook how just a few bad bets can quickly destroy us. Hiring the wrong executive, getting behind in our fundraise, or even waiting too long to get the product shipped. Every one of those bets has a real cost, but it always comes back to "time" as the only way to defend against a bad bet.
We've made tons of bad bets. We bet on products that never got traction, people that never delivered, and a million marketing plans that never grew our business. I'm not sore about making bad bets — we have to make lots of bets in order to figure out what works. I'm thankful that we had the foresight to always focus on profitability first, and then bad bets.
Compare that to most startups that have 12-18 months of runway. The time it would take to hire someone, find out they were horrible, and then try to backfill them with someone who isn't could take a year. How do you survive that kind of bad bet when you only have a few months to get it right? You can't. Survivability is the key to making bets.
Every year since our inception, there's been some company that was going to come along and destroy some facet of our business. We used to get super freaked out by this as anyone else would. We'd say, "Oh no, fancy new company X just raised a ton of money to do exactly what we do with one of our products! We're doomed!" And then we'd spend months trying to figure out how to possibly defend ourselves.
But then something really weird happened — time passed. Unlike our new evil competitor, who was burning through cash as fast as they could raise it to topple us, we had the luxury of being sustainable while they were still fighting for air. While they went from spending all of their time chest-pounding on social media to getting super quiet trying to fill in a down round, we just kept chugging forward.
In over a decade, we've watched countless competitors come and go. In fact, so many that we're almost surprised when a company actually makes it past the 5+ year mark. What was our secret sauce? You guessed it — time. We had built a sustainable business that, while not always the hottest and shiniest, continued to be the most stable.
Knowing that we'll be around for a minute gives another unusual asset — the ability to think long-term. Throughout most of my startup career, I have always lived pretty much hand-to-mouth with my startup. I was constantly trying to "feed the beast" of payroll, OpEx, and marketing. In fact, I spent so much time just trying to survive that it was always difficult to think long-term. But the long-term thinking is where the gold is.
Long-term thinking gives us the ability to build things that won't possibly benefit us now but put us markedly ahead of our competition in the future. Startups aren't well known for long-term thinking. We tend to think in terms of "What makes sense this month, or this quarter?" Frankly, we're not well-rewarded for super long-term bets because we tend to have to prove ourselves with the short-term bets first.
All of this long-term thinking is supported by a single, basic fact — we have an unlimited runway. Not because we raised a massive round of capital or did anything fancy. We just kept expenses lower than revenue as our first priority. We've essentially invested in the asset of "time," and now we're learning how to use it as one of our greatest advantages in the startup game. Who would have guessed?
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.