Businesses take time to grow.
What I hate about Silicon Valley is that this ecosystem puts a lot of pressure on entrepreneurs to grow their companies at unnaturally fast speeds, across all dimensions: user acquisition, headcount, revenue, even expenses.
I’m not saying that growth is bad. But I do believe that more often than not, a slower and more deliberate pace of growth early on can set an entrepreneur up for success later on.
What is the root cause of this pre-mature growth pressure among founders? It’s investors. When you raise money, you buy into a rat race that compels you to show progress toward a huge ROI for your investors. Some investors are patient, but many are not and want to see fast returns on their investment in a startup, pressuring founders to raise more funds or take quick exits. The way to get to higher valuations fast for the investor is fast growth.
I chose to bootstrap my last startup because I didn’t want to deal with investor pressure. I wanted to grow organically, at a speed that I dictated.
Today I’m proud to say that my company pulls in substantial revenue and is highly profitable. But the earliest days were ridiculously modest in terms of performance. The following screenshot is my company’s actual Profit & Loss Statement from 2006. Keep in mind this is eighteen months after I started my startup: