I encourage you to read what Evan Williams has to say (courtesy of Gigaom) about some of the mistakes he made at Odeo. Evan is one of the founders of Blogger which he sold to Google and is also founder and CEO of Odeo, a podcasting company. He goes on to outline a number of mistakes that he has made as an entrepreneur such as not understanding who his customer was and wanted, starting off with too broad a market focus, and raising too much money too fast. It takes alot of guts to publicly tell the world that you screwed up and how you screwed up. More importantly, it seems that Evan has narrowed the company’s focus and cut down some excess management to rightsize his business. As I have mentioned in a previous post, having too much money can be a curse and not a blessing. If you don’t know who your customer is and what your customer wants and how you uniquely deliver that, no amount of money will help you answer those questions. As you know, the more money you raise, the bigger the expectations are for your business. If you raise too much too soon, you may feel extremely pressured to go big and broad too fast without really getting the basics down first. I am sure Evan is not the only CEO to have felt this pressure to run fast, even if he didn’t ultimately know in which direction he was going. My only advice is that in the early days as your are experimenting and understanding your market and customer base, a smaller first round of capital may be a better bet for you as it forces you and your team to be resourceful and focused while better aligning investor expectations.
Published by Ed Sim
founder boldstart ventures, over 20 years experience seeding and leading first rounds in enterprise startups, @boldstartvc, Saas 2.0, googlization of IT, security, smart data; cherish family time + enjoy lacrosse + hockeyView all posts by Ed Sim →