There are a few cultural practices baked into the startup ecosystem that - after living in it for a few years - I think are incredibly toxic. One of them is the obsession with growth rate. Paul Graham’s foundational essay on startups that coined the term literally says that, “Startup(s) = Growth”. And from their first pitch competition or meeting with an advisor, founders are queued and trained to prioritize growth at all costs.

However, because a lot of software products are free (a problem in itself), prioritizing growth usually doesn’t mean prioritizing increases in revenue or profit. In fact, it usually means the opposite: burning capital in order to inflate vanity metrics like user signups, app interactions or page views.

Chamath Palihapitiya - the founder of Social Capital and one of the most wealthy startup investors in the world - gives a great talk explaining the toxic dependency cycle this creates between investors and founders that I will link here.

The thing that floors me most about this behavior is how contradictory it is to traditional business best-practices. Focusing on positive cash-flows, P&Ls, and revenue targets is the life-blood of business. But I was in 3 different accelerator programs, and I can tell you the thing these programs teach you is how to pitch a business - not build a business.

And I get it. Building a sustainable, profitable, slow-growing business is boring. But focusing on those fundamentals means that when you do reach one-thousand, one-hundred-thousand, one-million customers (not users) - your business is strong enough to handle and support that scale.

Now, I’m not saying you shouldn’t take investment or spend periods of time growing the business at a loss in order to achieve the above. I’m saying that the priority should be to achieve the above and taking on and spending that capital should be in service of that end goal. I only want to take money when I know our spending plan means we won’t need to take it again.

By focusing on speed over sustainability and not building a business’ strength to support the scale it’s designed to achieve, every stakeholder will suffer in the end. So, please...at least think about how your business is going to make money before you start it. And open a god damn spreadsheet once in a while.

I’m speaking from personal experience 🤦.

Note: This is part of a larger blog series on 10 Things I Learned From My First Failed Startup. Checkout the rest of the series and tweet your thoughts at me.