When my husband Marko and I founded Testlio five years ago, we didn’t realize how our own frugality would influence the growth of our company. I’ve constantly stressed the need to keep our burn rate – the amount of capital we spend monthly – as low as possible and to understand the value of everything we purchase. As tech investors have begun valuing sustainable growth over growth at all costs, this strategy has started paying off.
Sustainable growth hasn’t always been in vogue, though. Watching the rise of companies like Uber and Facebook in the late 2000s made you feel like the best way to reach success was to identify a common problem and pour money on it. Sometimes that gives companies enough time to get their business fundamentals in order, but these days it’s increasingly common to see companies raising tens or hundreds of millions go up in smoke.
Startups haven’t always had to think critically about why they’re spending because they’ve never been in a market where they couldn’t continue raising money at higher and higher valuations. That used to be a way to extend your runway and develop a go-to-market strategy, but investors don’t want to see vanity metrics and ballooning overhead that startups used to be able to get away with. Building a stellar product is hard, but mastering the new rules to startup success don’t have to be. Here’s how you can grow your business the right way.
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