This is a great follow on question, together with “What can we do to mitigate those risks?” Once the seriousness of realizing how fast your money will run out, and how little time you have before you need to be out fundraising sinks in (allowing three months for fundraising), you may realize that you have some big risks.
- Should we tighten our focus? The answer to this is frequently yes – this is one of the most effective ways of getting more done. Look for ways to cut out activities, initiatives and particularly work for customers that aren’t a perfect fit for your business.
- Should we cut out some of the less important product features?
- Should we lower our burn rate to extend our runway?
- The longer the runway, the higher our chances are to reach the milestone. Given that it is not predictable how long it will take for us to find product/market fit, or a repeatable/ scalable sales process, it is my personal recommendation that you keep burn as low as possible while in the first two phases, and then throw the switch hard over to the “invest aggressively” position as soon as you have found a repeatable, scalable and profitable sales process and have the cash to finance that.