52 Bicycles

Douglas Burke wrote a neat article extolling the virtues of “Bootstrapping 2.0“.

Ask a group of Silicon Valley veterans to talk about their early mistakes and you’re likely to hear a boom-era story about a small, VC-funded start-up that failed because it was more focused on spending capital than finding a stable way to turn a profit.

I learned the hard way when I was brought in to help turn around a New York-based company during the dot-com bust. Although the founders had a good idea, they were better at raising money than taking the idea from the drawing room to the showroom. By the time I joined the company, they had worked their way through 10 different business models and over $20 million of venture and angel capital. Most of the money was spent on infrastructure, marketing and advertising.

Looking back on the experience, I can’t imagine it being much different from owning a fully-loaded luxury car without a steering wheel.

(my emphasis added)

This seems about right. Venture capital means you make your play, and speed is the order of the day. If you’re confident enough in not only your idea, but your particular business plan, this may be the right model - a drag race!

It’s possible that my biases are reflected in my favorite motorsport sport, F1:

• A focus on keeping the car as light as possible
• The key differentiator is in the brakes - braking late is what can let one pass in a corner more than the acceleration heading out of it.
• Top speed takes a back seat to handling (e.g. steering)  

Can definitely put that metaphor to work more, but  if you think your business has twists and turns yet to go, taking out the steering wheel is dangerous. That said, if the track is straight, you’d trade that wheel for rocket fuel.

This entry was posted on Thursday, March 6th, 2008 at 2:22 am and is filed under Technology Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Reddit This