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independence4 unconnected · 1 more author in those circles
applies to

b2b and consumer, no audience needed

mixed results

confidence

high

evidence

11 claims · 7 articles · 4 receipts

window

2016-01-05 → 2023-12-27

4 builders who never spoke to each other

Keep the burn low enough to survive being wrong

Fixed costs near zero buy time, which is the only thing a slow start actually needs, and paying a team in equity while the model is unproven keeps a failed attempt to a modest sum rather than everything. Money removes the constraint that would have forced focus, which is how a company ends up attacking a whole value chain at once instead of taking two or three easy wins first, and a labour-heavy promise raises your cost with every transaction.

The method

  1. 01

    Keep the burn low enough that a failed venture costs you a modest sum rather than everything, by paying the team in equity while you test the model.

  2. 02

    Keep fixed costs near zero so that a slow start cannot force you to close. The point of low overhead is the time it buys you.

  3. 03

    Raising heavily from day one removes the constraint that would have forced you to focus, which is why founders with a previous exit are the ones most likely to scale before they have fit.

  4. 04

    Differentiating on a labour heavy trust promise raises your cost base with every transaction. It works only for as long as you can fund the difference.

  5. 05

    Take two or three easy wins in a new industry, deliver them, and expand on the trust that buys you. Attacking the whole value chain at once creates complexity and no value.

What it returned

  • $10,000

    WePlate never earned revenue and cost the founder under $10,000 of his own savings across eight months, because the team took equity only.

  • $40

    Howell Market ran at roughly $40 a month for company paperwork and Shopify hosting, and broke even on a handful of orders before closing.

  • $7

    Beepi sent an inspector to physically check each car while its rival Vroom listed on photographs alone. Beepi burned roughly $7 million a month, exhausted $149M of funding, failed to sell to two buyers and closed in December 2016.

  • The analysis pairs Katerra with Atrium, Justin Kan's venture funded by Andreessen Horowitz and by Y Combinator, which also tried and failed to become a single vertically integrated legal service.

Sources

the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

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the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

963 corroborated plays to draw from · 3 a week

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