| 5. Spend less than they make
Had they done that, they could survived long enough to find their niche. But throwing out multiples of your revenue out of your own pocket means you're on borrowed time.
1) "how much profit have we managed to make?"
1a) (modulo exchange rates - it's more balanced now, but a few years ago almost all our expenses were in AUD and our income is all in USD)
2) "how many people can we hire with that profit?"
2a) (save a bit for a rainy day)
3) "hire the next roles off our roadmap while fitting within our means"
The question becomes what happens when your growth rate goes to 0, and your customers are churning because your VC backed competitors is cranking out features? It’s not clear that “just” spending less would have saved Flow.
> Both models work, but you’ve got to pick one and stick to it, or you’ll find things mysteriously going wrong and you won’t quite know why.
[0]: https://www.joelonsoftware.com/2000/05/12/strategy-letter-i-...
The story is not 'save your money' frankly the story is 'have the most leverage'.
There's probably a lot more to it obviously, but it doesn't matter what this CEO did, he was going to be outgunned most likely.
It’s not just the building of the app that’s capital intensive - it’s the customer acquisition cost.
A highly capitalised startup with a war chest can afford to spend $100+ per customer. You can’t.
It’s like the OP thread says - you can’t field of dreams this. “If you build it they will come” is not a business strategy when your competitor is spending millions of dollars on ads.
If the goal is to "win"... ya, you're probably going to need to spend money like it's someone else's, and should take that VC money.
There are not that many companies that can do this, usually early movers, people who caught a wave of interest.
For something just a bit more complicated than 'To Do' he was going to need to take on VC money.