The New Venture Rules, Part XXIV: Get Big Cheap

I’m liking this… the buzz words are usually “fast” … “velocity” … but get real … it takes time to build value … usually ~ 5+ years. Look a today’s hotties goog, csr.l, sigm, divx, … not exactly “fast” — iain —

The New Venture Rules, Part XXIV: Get Big Cheap: “David Cowan touches on something I haven’t articulated very well, so thanks to him for making the points below:

….the winning recipe today for aspiring entrepreneurs is GET BIG CHEAP. Don’t waste expensive development on untested ideas, and don’t let a fat marketing budget mask a weak value proposition. If instead you tinker your way to scalable organic growth, you’ll have a valuable business on your hands. Don’t worry about how long it takes—just make sure your burn rate is low enough to accommodate several cycles of iteration.

As one entrepreneur put it to me tonight when I forwarded the quote to him, ‘That doesn’t sound like a venture guy.’ No kidding. Matter of fact, I’ll wager that most venture guys will find the above terrifying, and, as nutty as might sound, will argue instead for the Big Burn model, where you raise money, build an expensive team, and then spend heavily as you sprint at the wall going after a specific opportunity.

(Via Paul Kedrosky’s Infectious Greed.)