Nothing to waste: The advantage of being underfunded

Nothing to waste(wāst): The advantage(ədˈvan(t)ij) of being underfunded(ˌəndərˈfənd)

By Derek Sivers

Start-up companies who have too much money often blow(blō) it. There’s an advantage to being underfunded to keep you from making mistakes.

I don’t know if you’re old enough to remember the first dot-com boom(bo͞om) of 1999. But I’ll describe what it was like for CD Baby to have a booth in the exhibit(igˈzibit) hall of these conferences(ˈkänf(ə)rəns):

  1. Me at a plain(plān) table, talking with people and handing out flyers. Not many other booths(bo͞oTH).

  2. Me at a plain table, talking with people and handing out flyers. Other booths have big LCD displays and fancy corporate(ˈkôrp(ə)rət) backdrops.

  3. Me at a plain table, talking with people and handing out flyers. Other booths have booth-babe(bāb) models, fancy multimedia(ˌməltēˈmēdēə, ˌməltīˈmēdēə) displays, and giving away $50 items.

  4. Me at a plain table, talking with people and handing out flyers. Others have bought out an entire pavilion(pəˈvilyən), laser(ˈlāzər) light shows, giving away cars, offering a million dollar prize.

  5. Me at a plain table, talking with people and handing out flyers. Not many other booths.

I remember being pressured(ˈpreSHər) during the dot-com boom to take venture(ˈvenCHər) capital(ˈkapitl). But my response was always, “I’m profitable(ˈpräfitəbəl) and have plenty(ˈplen(t)ē) of cash. The company doesn’t need more money.”

They’d come back saying we could “expand our reach” or other vague(vāg) terms that to me sounded like blowing money on ineffective(ˈiniˈfektiv) advertising(ˈadvərˌtīziNG).

They’d say we could have a big marketing budget(ˈbəjit), but I’d say, “Marketing doesn’t cost money. ‘Marketing’ is another way of saying ‘being considerate(kənˈsidərət)’. It’s all in how you talk with people.”

By then they’d decided I was just crazy and would surely(ˈSHo͝orlē) fail(fāl), which was fine with me, because it let me get back to focusing on my clients and customers, undistracted(ˌəndiˈstraktəd) by investors.

https://sivers.org/novc