How to Keep Your Startup Alive


A blog called My Startup Has 30 Days to Live is making the rounds right now, and it’s an incredible read. Here's how it describes itself: "Through a series of unfortunate events, I took a bootstrapped (and profitable) startup onto the VC rocket ship. Now it's crashing into the ground. Hard."

If you’ve ever started a business, chances are it will bring back memories (if not activate borderline post-traumatic stress disorder). The themes on My Start Up Has 30 Days to Live are familiar and consistent with every entrepreneur with whom I speak. For the moment my company, SimpleRelevance, is sufficiently capitalized that I have enough distance to have perspective on this particular issue, so I thought I’d share my thoughts.

There are universal lessons that are easy to see in retrospect, but often hard to observe in the moment.

Key things to think about are:

Trust your instincts. Be constantly working to educate your gut feel, but at the end of the day if it doesn’t “feel right” it almost certainly isn’t (despite whatever your wizened, knowledgeable advisor may tell you).

Be really careful about scaling and the dependency on additional capital it creates. Investors often want you to scale faster, but remember that your interests may not be aligned on that front. Scaling businesses very rapidly is great if you have an abundance of capital, limited time, and a portfolio of businesses where 1-2 winners will create most of the returns.

• If you have capital you really don’t want to lose (friends/family/yours in particular) invested or an extreme desire to see your business succeed, consider scaling more slowly, extending your runway, and giving yourself the opportunity to keep learning and evolving.

Scaling feels great -- it creates the illusion of success. As much fun as it is to have a growing organization, remember that spending money is far easier than taking it in.

Bootstrapping is a noble endeavor, and people who make it work should be admired. The discipline that being cash constrained brings can unintentionally serve to focus the business much tighter on what the market needs. Getting lots of cash too early may only serve to accelerate your speed in the wrong direction, leaving you in a lurch and dependent on outside financing (as it has many others).

Erik Severinghaus is a Chicago-based serial entrepreneur and business leader. Erik was part of the founding team for iContact (a leader in email marketing) and spent six years as a consultant in IBM’s IT Optimization Practice before founding his current company, SimpleRelevance . SimpleRelevance specializes in marketing personalization and helps companies easily send the right email content to the right person at the right time, leading to revenue increases of 30-300 percent per email campaign. Learn more at, find Erik on Google+ and follow him on Twitter .

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