Why Startups Should Chase Incremental Revenue Instead Of Unicorns
If a startup spends all its time chasing jackpots, it’ll just bleed its runway to death.
This is a lesson most first-time entrepreneurs don’t learn until it happens, but even experienced startup leaders can succumb to the lure of opportunity or the weight of desperation in a way that turns a risk-tolerant strategy into high-risk gambling.
There’s a huge difference between those two paths.
Gambling with your runway
I’m a poker player, I have been my whole life. And while I do most of my poker playing in various casinos, I will state emphatically that what I do isn’t gambling. I’m experienced and I’m a grinder. I have strategies for my play, for who I’m playing against, and for my stake. I have strategies on top of strategies.
High risk gambling is — well, it’s everything else in the casino, but the easiest example to parse is the roulette table. When you bet a single chip on black, you’re taking on a relatively even risk for a relatively even reward. When you bet a stack of chips on a single number, you’re making a high-risk, high reward bet.
But make no mistake, both bets are indeed bets, and both are devoid of strategy. You have no influence over the outcome.
Why chase incremental gains?
I get a lot of pushback on my “slow-and-steady-wins-the-race” approach to startup.
“But startup is about high risk! High reward! High tech! High growth! It’s about moving fast and breaking stuff! It’s about apologizing after instead of asking permission first!”
It isn’t. There’s a distinction. It’s subtle, but it’s important.
My approach to entrepreneurism is about moving fast and breaking stuff and all those other things.
Starting and building a company, however, is not that. It’s the result of that. If you take an extreme energy and release it with no plan, no direction, and no control, you get an explosion that disperses the energy quickly and does a lot of damage. If you harness that same energy…