“We simply can’t cut costs without hurting our growth”

Edited excerpt from The Resetting of the Startup Industry by Marc Suster:

The smartest companies in the market that I know are working aggressively to lower burn rates through pragmatic cost cutting, knowing that the next fund-raising cycle may be unpleasant. This prudence is smart and welcomed.

I’ve heard enough companies say “we simply can’t cut costs as it will hurt the long-term potential of the business” for them to get a wry smile from me. We entrepreneurs have been spinning that line for decades in every boom cycle. It’s simply not true. Pragmatic cost cuts are always possible and often productive.

Start early. Give yourself enough runway by controlling costs.

Notes:
(1) Mark’s entire post is a timely must-read for startups and VCs. Typical of Mark; it’s outstanding.
(2) Practical advice, from Rafat Ali: Get to profitability — here’s how.
(3) The context, from Ben Horowitz: Profitability = control of your own destiny.
(4) An extreme case: One way for startups to gain time.

3 thoughts on ““We simply can’t cut costs without hurting our growth”

  1. Pingback: Three essential actions to survive the coming startup storm | A Founder's Notebook

  2. Pingback: How money can distort your startup | A Founder's Notebook

  3. Pingback: How money can mess up your startup | A Founder's Notebook

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