Ah, the startup. It’s a unique type of business that attracts a lot of interest (especially in the tech world).
A start-up is a fantastic place. There, costs are considered to be the responsibility of others. It’s a place where the annoying thing called revenue never becomes a problem. It’s a place where you can spend other people’s money while you figure out how to earn your own. It’s a place where the laws of business physics don’t apply.
The issue with this excellent place is that it is a fairy tale. In actuality, the same set of economic laws and market forces control every business, regardless of how old it is. Revenue comes in, costs go out. Either make money or quit.
Startups try to avoid this reality. They are run by individuals who are attempting to delay the inevitable, i.e., the time when their company must mature, make a profit, and become a genuine, sustainable firm.
Anyone who approaches business with the mindset of “we’ll find out how to profit in the future” is insane. That would be like starting to construct a rocket ship by denying the existence of gravity. A firm that does not have a profit motive is merely a hobby.
Therefore, avoid using the concept of a startup as a prop. Start a real business instead. Actual firms must manage actual issues like payroll and invoices. Profit is a concern for real firms from day one. Real firms don’t say, “It’s OK, we’re a startup,” to cover up serious issues. You’ll have a lot better luck succeeding if you conduct yourself like a real business.
