Tuesday, March 21, 2006
Penny-wise, pound foolish
One of these days, I'm going to come with my Top 10 list of ways emerging businesses are Penny-wise, Pound-Foolish. While there are plenty of counter-examples such as RightNow's bootstrapping story and the Inc. magazine story of my friend Dave Morgan (founder of Real Media & Tacoda), too often I see organizations tout how great they are at being frugal by sharing symbolic gestures like desks built out of doors (last I checked, I could get a desk at IKEA for roughly the same price as a door) while wasting real money in other areas. The most common mistake is over-hiring sales people too early in the process which is often coupled with over-spending in marketing. Mark Leslie's Sales Learning Curve framework outlines this in great detail using his composite company example -- Nano Optical Customer Adaptive Software (NOCASH). His whitepaper and presentation are posted here from his CEO Briefing that Altus Alliance hosted.