Edited excerpt from The most fatal mistake to avoid as a startup, a presentation I gave to a group of startup founders:
What’s so bad about scaling prematurely?
- Low ROI, high burn rate: Sales and marketing for a product without product-market fit will suffer from low conversions and low renewals.
- Frustration: When you don’t have product-market fit, everything seems too hard, and everyone is frustrated. See:
- Not building permanent value: When you eventually fix your product, you’ll have to redo your sales and marketing anyway.
- Distraction: Managing all those people will distract you from your key task — finding product-market fit. (See: The most important factor in startup success.)
Bottom line: Don’t scale before you have product-market fit. You’ll burn money, delay true success, and be miserable.