The trap of too much money
Why throwing money at growth can sink your startup
Time: 2.20 Minutes
“Every overcapitalised startup eventually becomes an incubator.” - Naval
I’ve lived this truth, and it’s a lesson every founder needs to hear. Too much cash can blur your focus, turning a promising startup into a scattered mess.
In the early 2010s, I worked for an overcapitalized startup in its growth phase…
We chased too many shiny distractions like multiple side products, new services, bold experiments. None hit product-market fit (PMF). None drove sustainable revenue.
Because we scaled before perfecting our core product.
Our capital fueled ambition, not focus, and we paid the price. A lot of spinning wheels without traction.
In contrast starting lean, solving one pain is key. Instead of building a dozen features, they obsessing over a single, scalable product to build sustainable unit economics.
It’s when each sale generates profit without breaking other parts of your business, like margins or operations, and you can repeat it consistently.
Think of it as a recipe: every unit sold should taste the same, delivering value and profit without chaos.
Resist scaling until your PMF is bulletproof.
So stay lean, focus on your core, and scale only when your foundation is unshakable.
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