Yesterday I wrote a post about how much capital your startup should raise. In that post I was talking about how it is a bad strategy to be underfunded. In general when capital is available take it (provided it’s on the right conditions and from the best people from whom you can raise). It’s also bad to raise too much, too early. If you’re interested in that topic I cover it in the article linked previously.
I made a diversion in the article that I shouldn’t have taken. I talked about the Silicon Valley memo that has been circulated for the past couple of years that says you should “fail fast.” What I said was:
“I’ve even heard people repeat this bullsh*t Silicon Valley mantra about “failing fast” which is horse puckey. The line goes like this, “well at least you know early that your business isn’t going to work and you didn’t have to waste 2 years and $1 million trying to bang your head against a wall.” That is so self centered it winds me up. Tell that to the person who wrote you the $50,000 of their hard earned money and entrusted you to try your best. Fail fast? How does your brother-in-law feel about that?
And how do you think the next person who’s thinking about writing you a check going to feel about that sort of cavalier attitude with their money? Fail fast = quit and give up easy = spaghetti against the wall = no clear strategy going into your business = no ability / willingness to try and pivot as market conditions change = easy way out = today’s management mantra that will be laughed at in 10 years. Who started this meme? I say define a strategy, test it up front and pivot if you’re not getting the traction you had expected. Fail fast on your own dime.”
Obviously when a meme like “fail fast” forms and conventional wisdom builds in support of it you’re likely to get attacked for saying, “the emperor has no clothes.” But I just said it. Naked. I shouldn’t have covered it in the last post because I should have stayed focused on the topic of how much money to raise. Here’s an example of one comment I received,
“So you think it’s better to plan and build for years without testing it on the market and then make a big splash release and hope for the best?”
Nice logic, hey? If I say “fail fast” isn’t the right strategy then it must be a long, slow release process, right? I’m not attacking anybody’s religious beliefs. I’m trying to enter the debate with what I found to be a very destruction guiding principle that young people have started to believe. The following highlights what I do believe and why fail fast is wrong:
What is the right way to build a startup? [click to continue…]
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Recently I’ve been debating with a number of young startup companies that are raising money in the next few months, “what is the right amout of capital to raise at a startup?”
