Y Combinator Startup Podcast The Right (And Wrong) Way To Spend Money At Your Startup
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Feb 12, 2025 Startups often fail due to poor spending decisions. Founders need to be deeply involved in sales and marketing until achieving product-market fit. Hiring too soon can hinder progress, so it's crucial to maintain a lean team. Smart financial strategies focus on minimal spending and strategic allocation of resources. Maintaining transparency with investors and prioritizing sustainable growth are essential to avoid common pitfalls. The path to success lies in understanding when and how to invest wisely.
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Pre-Seed Spending
- In the pre-seed stage, minimize spending to essential expenses.
- Focus on core product development and avoid unnecessary costs.
Seed Stage Hiring
- At the seed stage, prioritize hiring one or two key engineers.
- Delay sales and marketing hires until after achieving product-market fit.
Founder-Led Sales
- Founders should handle sales initially; don't hire salespeople too early.
- No one understands your product and market better than you.