In the old days, there was pretty much only one way to grow a business. Start small, make some money, get a little bigger, repeat. Over time, you could fund your way to bigness. VCs can help you jumpstart, sure, but raising 100 or 400 million dollars to skip all the steps on the way to bigness is rare indeed.Your business has to work when it’s small in order to survive to the point where it gets big.
A magazine, for example, can’t have a business plan that says it will accept no ads until it’s bigger than Time or Newsweek. I call this a cliff business… a business that doesn’t ramp up, but one that runs flat until, miraculously, the business hits critical mass and works.
In our networked world, cliff businesses are a site to behold. eBay, for example, or Microsoft.
So… if your product or your service or your business is going to be nothing but trouble until it reaches the cliff, I think it’s better to pick something else to launch. Something remarkable and cheap and likely to make customers and investors happy long before you get to the cliff.
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