I’ve noticed myself become increasingly conservative in evaluating early-stage ideas.
You can do the math yourself, dividing burn rate by price point and judging whether it’s plausible to sell enough copies and reach profitability before bankruptcy.
If that equation goes red, what do you do?
Radically overhaul the pricing model? Play to investor interests? Fight for a big one-time consulting gig? Pack it in?
You might have caught me suggesting any of the above. After all, the math doesn’t allow for reaching profitability on the current trajectory.
I was overlooking the unquantifiable value of desperation in unearthing new options, as well as the benefits of simply being in motion.
While it’s not advisable to accelerate toward a wall, the imminent collision does have a way of changing your view of the problem and your willingness to hustle up a solution. Plus, you’re getting new data, credibility, and connections as you go.
This is dangerous advice, and I don’t mean to encourage you to over-expose yourself to risk.
But as I look back at my previous companies, our turning points repeatedly appeared just before we shot off the cliff.
The caveat is that you’re eventually liable to find yourself in mid-air (as we inevitably did).
Still, It’s enough to make me second-guess the runway math for companies which are still small enough to be extremely maneuverable.