Until a startup achieves product/market fit, has a repeatable customer acquisition process, and enters scaling mode, it’s important to be as scrappy and cost effective as possible. Every dollar wasted is another dollar of dilution and a dollar closer to not having enough runway to figure out how to make things work (see Figure Out How to Stay in the Game Long Enough to Win). Once the business is scaling and is focused on maximizing growth, it’s important to slowly let go of some (not all!) of the scrappiness.
Entrepreneurs that have bootstrapped the business have an especially hard time letting go of some of the scrappiness as the business starts scaling. With so few resources to begin with, there’s no choice but to make every dollar count, such that scrappiness is deeply ingrained within all the team members. Only, as more and more market opportunity is presented, the tendency is to continue using the same approach when it’s better to ease up a bit and try new things to grow faster.
As an example, at Pardot we were having a hard time finding software engineers. We had always stayed away from using recruiters because we wanted to save money and figured that we’d eventually find great team members. After not having luck for several months we decided to hire recruiters (see Working with Recruiters in Startups) and offer a $10,000 referral bounty to anyone that sent a new hire our way (the bounty was for anyone, not just employees). By investing in ways to broaden our search for talent, we were able to bring on more engineers and grow the business faster. It was the right move to let go of some of our scrappiness.
What else? What are some other examples of slowly letting go of some scrappiness to grow faster?