Chris Dixon has an intriguing blog post titled “Timing Your Startup” which ends with the following quote:
One way to mitigate timing risk is to manage your cash accordingly. If you are trying to ride existing trends you should ramp up aggressively. If you are betting on emerging trends it is better to keep your burn low and runway long. This takes discipline and patience but is also the way you hit it really big.
I generally subscribe to the same theory. But I have recently heard some people I respect make a counter argument saying that startups that take too long become “stale." The idea is that potential new investors and potential employees will look at a company and essentially conclude that because it’s been around for a number of years isn’t going anywhere. As a result, the argument goes, the company will eventually run out of money and talent, as good people leave and can’t be replaced.
There is a related argument that suggests that no matter how disciplined you are, you will wind up being engaged in something else when the trend actually comes around. Meaning your team will have built a bunch of stuff that may or may not work with the trend as it actually takes off. If it doesn’t work, will you really jettison all of what doesn’t work? Or will someone who starts from scratch without baggage be that much faster?
I am phrasing these as questions intentionally because I actually do believe that the "overnight success that was years in the making” is possible not just in the music or film industry but also for startups. But there are real risks of time working against you that go beyond burn rate.
