6 months of cash left to burn? Here’s the game plan
You’re a startup, and all of a sudden you find yourself running out of cash. What do you do next?
Take an example from Ben Horowitz: Go hard or go home.
Horowitz, now better known as the cofounder of Silicon Valley’s most famous VC firm, is the poster child for how to run hard in the face of failure. When Horowitz founded the hosting service Loudcloud in 1999, the business was a fast winner. Not only did blue-chip companies like Ford and Nike sign up, but Horowitz took the company public less than two years later.
The very next year, Horowitz gutted Loudcloud and rebuilt it as something completely different: Opsware, an enterprise software company. It seemed insane at the time, but five years later, he sold the company to Hewlett-Packard for $1.6 billion. Horowitz was staring down a company future where he felt no money lay. He reacted quickly and decisively. There were times when he only had a few more months of cash left in the bank, but he didn’t let off the throttle.
Horowitz was acting as every good entrepreneur should. Instead of watching the market eat his pie, he and his team tore the floundering business apart, cashed in on the pieces, and built something better. He could have gone home, but instead, he pushed even harder.
In the cutthroat world of tech startups, that’s the best way to win.
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