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The focus on money speaks to motivation problems. You need to be in it for the process, not the success...



I think you are correct in theory, but it is difficult to put that into practice. The biggest hurtle, regarding money, is the question of when to increase the burnrate? That was an issue that P struggled with. In 2002 and 2003 we mostly just tinkered with stuff. He did not spend serious money on the web at that point. In 2004 it was clear that the music industry was changing in a big way. He had been dabbling with RSS projects, and he had been working with musicians. We played around with some podcasting stuff, we talked late into the night trying to imagine how iTunes would effect things, iPods, free music, FLAC files, more bandwidth, etc. In 2005 he felt it was time to go all in. So he hired a lot of people, so he could pursue some of his more ambitious projects. At that point he was spending maybe $30,000 a month.

At some point, you do need to start thinking about money. It becomes an obsession, I think for nearly any entrepreneur. I see the problem like this:

1.) if you crank up your burnrate too soon, then you will run out of money and fail

2.) if you do not ever crank up your burnrate, then you do not ever build a big business

Obviously, there are some qualifiers that it would be good to add, but I think the above problem covers a situation that maybe 80% of all entrepreneurs must face.

Once you do crank up your burnrate, then you need to think about money. A lot.


By the way, for anyone interested in the question "When should I increase my startup's burnrate?" the best answer I've seen is in the book The Four Steps to the Epiphany:

http://www.amazon.com/Four-Steps-Epiphany-Steven-Blank/dp/09...

The book is by Steven Gary Blank, whose weblog is often linked to from Hacker News.




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