The Over-Inflation Paradigm

Before joining the awesome Tivix team, I had been working as a project manager on a web project for six years. This project was considered as a success not only in Poland, where it is based, but on the whole global market as well.

During those years, I learned about creating successful start-ups and Internet businesses in general. You don’t necessarily need to be backed by big money from a big player or venture capital. I’ve been at many start-up conferences, challenges and sprint sessions, because it has always been a pleasure for me to help people who are less experienced and share my knowledge with them. However, I have sometimes met people with an attitude that I considered as naive.

Many brilliant people with excellent ideas say that their plan is to build “an awesome app, a must-have, a revolutionary change” that everyone will use on their daily basis. That’s okay, many of them have a big chance to be a game changer, to become a big player in the market just with their knowledge, the momentum they have, and passion they share. But immediately, when I hear that their next step (and their only step in mind) is to “make it good enough for big players to be interested in, get funds and then… bam! Hire 100 people and develop the business 1000x faster!” we get to the over-inflation paradigm.

I can give countless examples of really great, innovative, interesting, and, more importantly, promising, start-ups that went under immediately after getting funded. Too much funding, I guess. My assumption is that they either wanted to expand so quickly that they lost control of the project’s consistency or that a big player gained too much control without the knowledge about how the company works and what creates the company’s identity. As we know from history, rulers that were externally assigned, even with the best intentions, could not rule with success without having a thorough understanding of the people they came to rule.

To expand and grow as fast as possible is every young entrepreneur’s dream — become the new Google in a few years. But it’s a good idea to hold your horses for a moment, sit down with a sheet of paper, and think of every little thing that makes your business potentially (or already) successful. I think that having very few people on a growing project is the key to success. First of all, when you can only afford to hire five people, you will find and  choose the best five people out there that share the same passion and commitment you have. When you have limited resources, you automate everything you can to simplify management. You optimize the costs as efficiently as possible. You become the face of your product. Basically you are the product you want to sell.

Now think of what happens when you get the $10 million in funding. Suddenly, you can afford to hire hundreds of people, hundreds of servers and you don’t have to be so careful about the costs. Suddenly everything on your “why I can be successful” list disappears. Your business has just over-inflated and will likely die in a few years from spending more than you can actually afford.

My advice consists of one simple rule: Think globally, and keep it small. If you grow at a reasonable, but constant pace, you will always have time to adapt, to optimize information flow and internal procedures, and carefully choose employees and strategy. You don’t need to have a 10-storied headquarters to be able to aim for the highest stakes. You can keep your business relatively small, surrounding yourself with only the best people. As the late Steve Jobs said at the Stanford Graduation, “Stay hungry, stay foolish.” I would add “stay small, aim high” and never let go of youthful passion and naivete, because that’s where your idea was born from. Only try to make it better, slowly, step by step, constantly and with determination. Ovid, a Roman poet, once said: "Gutta cavat lapidem non vi, sed saepe cadendo” (A water drop hollows a stone not by force but by falling often). You don’t have to be a rapid, sloshing stream to attain your goal.

The Over-Inflation Paradigm

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