Decrease Your Startup’s Burn Rate
I often hear of companies burning their money on things they could acquire for free. And in some cases, the burn is due to sheer ignorance and not knowing how to accomplish something. So before you spend your dough, take a step back and figure out what you're trying to accomplish, and how you're trying to do it.
Here are my suggestions of how to handle the biggest money suckers.
I’ve worked in PR for a long time. And I can tell you that a client gets PR if they have a good story, and they don’t get PR if they don’t have a good story. So you can hire a 15-year-old if you have a good story, because every reporter will want it. And if you don’t have a good story, you will think every PR person sucks, but really, it’s your story. You will go through a lot of money before you realize this.
The first step it to read Made to Stick, by Chip and Dan Heath. The book will give you practice figuring out which stories work and which stories don’t. But what you really need to do is...create your own story.
And here’s how to do it: Write your press release at the beginning of the company. Before you launch anything. Before you get funding. Write the release that will knock the socks off the press. And then ask some members of the press if you’ve succeeded. You probably haven’t.
So keep making the release more juicy, more shocking statistics, more trends to latch onto, more huge achievements. And when you’ve written a press release everyone would write an article about, then build a company toward that release. You’re sure to get press—again, even if you hire a 15-year-old.
One of the hardest things about being an entrepreneur is that people think you’re unemployed. The best way to convince someone you actually have a job is to give them your company’s URL—meaning you need to have a website early on.
And as the company pivots, the site pivots. Which means there is constant back and forth with a designer. This back and forth is expensive. And the less experienced a designer you have, the more back and forth there is. A good rule of thumb is that everyone is a good designer if there are not a lot of constraints. If you don’t have a lot of design experience, you don’t know when you have a lot of constraints and when you have a few.
Twitter’s homepage, for example, looks simple and clean, but the interface constraints are so difficult that Twitter had a designer position open for a year before they could fill it.
This is all to say that you can save a lot of money on design by knowing design principles yourself. My favorite book on this topic is Picture This: Perception and Composition, by reknown children’s book author Molly Bang. The book is short and full of pictures that will shock you with a combination of simplicity and insight.
How can you tell if you need the book? If you think you’re a great designer, you definitely need the book. Because no great designer is reading this post. It’s just not a topic design-heads care about.
But even if you think you’re pretty good at managing designers, this book will save you money by making you aware of which changes will mess up the entire page, and which piece of a design is the linchpin for the user experience.
When you are raising money, you have to travel. When you are building partnerships, you have to travel. And you have to show up at conferences so people think your company is relevant.
That said, most founders travel too much. Here’s why: The only way you can have a startup is if your startup is your life. So, if you are very involved, married and/or have kids: do not launch a startup.
The demographic results of this situation are interesting. For example, women don’t launch startups because women care about their personal life. Also, the people who do launch startups have a higher divorce rate than other college-educated men. So it makes sense that startup founders travel more than they need to. Startup founders love excitement and new ideas, and startup founders have nothing going on at home. If they stay home all the time, they’ll have to face that.
So here’s how to cut your travel costs: Take care of your marriage. People like to think marriage is a big mystery, but actually, John Gottman has it down to a science. There is a 25-year study of what makes marriage work. This is the gold standard among people who study marriage, and you can get the essential to-do list in this book: Why Marriages Succeed or Fail: And How You Can Make Yours Last. Try staying home a few weeks and implement it. I bet you won’t need to go to so many conferences after all.