Hunger is key to early-stage startup success (and overfunding can ruin it)

Hunger is good! Why shouldn't startups over-raise?

Startups and their founders are a unique breed. They are born out of the desire to solve a problem or fill a need in the market. They need to be hungry for success, hungry for growth, and hungry for innovation. When a startup is starved, it has the drive and determination to push through the challenges and obstacles.

While money and resources are essential for any business, too much of them can hurt a startup. When a startup receives a large amount of funding, it can create a false sense of security and lead to complacency. As a result, they will overspend on unnecessary expenses and delay tough decisions. Ultimately, it could lead to a lack of urgency, causing the startup to miss out on potential opportunities, lose momentum, and become uncompetitive.

Hunger, both literal and figurative, pushes us to new heights. It forces us to dig deeper, to search for solutions that might not be readily apparent. We’re more creative, focused, and determined when we’re hungry. We’re willing to take risks and try new things, even if they seem risky or untested.

Many argue for blitz scaling to gain dominance before competitors can catch up. Momentum can lead to higher long-term profits and market share, even monopoly. I understand blitz scaling to take advantage of network effects or in winner-take-all markets. However, the decision to pursue blitz scaling should be based on the specific circumstances of the startup and its market. If significant capital was given to an early-stage startup, what would they blitz scale on when they don’t even have a problem-solution fit?

Of course, staying hungry and lean is not easy. It means putting yourself out there, taking risks, and sometimes failing. But those are the table stakes of the startup game.

Without hunger, an early-stage startup is just another company. But with hunger, we have the potential to be a game-changer, disrupt the market, and make a lasting impact.

Let’s stay hungry. Embrace the discomfort, the uncertainty, and the fear.