Almost every startup (including unicorns) staring at ‘death-by-cash-burn’ did not start off this way.
Most startups were based on solid ideas and were addressing real need gaps. Even the startups that went down in flames (e.g., GoMechanic) were addressing real pain points.
But to solve these problems, you need time to experiment, make mistakes on a small scale, and learn. And that takes time and patience.
But many of our startups and unicorns fell for our collective idolization of speed and greed. Everything has to be done very fast – there is no time to see if things are really working on a smaller scale.
E.g., if you are running a store, you need to go to 10 stores, and then 100, no matter if you lose money in every store.
And you glorify all this by giving it a name – blitzscaling. I remember one scammy startup that sold to a bigger EdTech company justifying all its misdeeds as side-effects of blitzscaling.
Here is the truth nobody wants to accept – for many startups today, the real customer is the VC. And the real revenue is funding.
At the risk of sounding stodgy, let me say this — this ponzi scheme can not run indefinitely. You may be worth $5 or 10 billion on paper, but reality will catch up.
You have to take the time, go through the pain, and build something real. There are no shortcuts.
– Rajan