The dot-com boom at the turn of the century was littered with tales of entrepreneurs cruising around Silicon Valley in new Ferraris with a shell of a business and a great domain name. When the dot-com bust happened, the entrepreneurs who were not diligent with their startup finances and didn’t save money for business capital were quickly washed out with the tide. The business leaders that were left standing ended up building many of the top businesses that exist online today.
The takeaway? Founders need to always be careful with any money they raise. How a business handles and plans for their startup costs can determine success or failure in the long run. The TV show Silicon Valley had a good example of this when their startup raised a large series A round. They begin looking at an elegant office and other cool perks that would be a nice reward for working so hard. But at the end of the day, the founder decides to reinvest the money into additional servers that the business needed and hires additional employees, saving some money for their small yet growing business. Instead of the nice new office and other luxurious signs that they made it, the startup team is still working out of a house, cutting costs. Despite being rich on paper a few days before the founder has to begin sleeping on a couch in the startup house to make room for the new hires. While the show hasn’t revealed how these actions will turn out, this is the type of cost-cutting mindset that founders everywhere should emulate while they build their company. (And there is, of course, the option of finding a coworking space.)
As a reminder to always be prudent, here are some nice money-saving tips for startup businesses: