Why Frugality is Important to Startups
For startups, often before investment or at the Seed / Pre Seed stage. We need to accomplish more with less. That's where Frugality comes in.
Back a generation ago, I worked at a large US company that is known for its smile.
This company actually had 14 Leadership principles.... And boy, did they talk about them all the time. However, it's great that they did because some of them have really helped shape how we build GoRoadie.
Today I want to drive into Frugality. Some might say about Frugality:
Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention. There are no extra points for growing headcount, budget size, or fixed expense.
Great right? Every business should listen to these words and they should swear by them.
Now, for startups, often before investment or at the Seed / Pre Seed stage. WE NEED TO ACCOMPLISH more with less.
It's important that you don't just see that with money but with our time. We need to be frugal with both. We need to really understand what we doing in any given day and question it's value to the mission.
So that means, that if we don't need to do a particular Ad Campaign, or go to a certain event - we don't. We focus on what we need to achieve.
Is a business trying to get you on the phone to sell you a product that you can't afford for say another 6 months. Don't have the call. Focus on the objectives at hands. Don't spend time that you simply don't have.
Early stage startups must be focused and completely frugal with their time. Otherwise we will fail to meet our objectives and if we fail to meet our objectives - it's game over.
So, how does Frugality breed innovation? If you have less time to complete tasks, generally we will think of smarter ways to do them faster. Often, this is where Lean and Agile practices come into play. If we need to be frugal with our time but want to change a metric - release a simple version of your software, validate your ideas, your hypothesis quickly then iterate.
I've seen too many businesses just spend money because they have it - and quite often they can achieve a lot more with less.
Someone who works for a large multinational told me a story that they once had to purchase a physical server for a 2 day event to host some software - because that's how the managers wanted it to be done. This cost their business over £10,000 when the IT department knew they could use AWS or Azure. Had the business used leadership principles in the way others do, they could have cited this and saved the company thousands.
At GoRoadie, we have launched in several UK cities, enhanced our platform to work in mega cities and build software that handles 1,000s of learners every month - you better believe we done it by doing the minimum release each time and questioning the time we spend on every meeting, 3rd party call, and feature released.
It can be hard but you can start by asking:
- Is it right to have this meeting now? Can we push it back to when we have achieved X?
- It seems like we are going to spend 2 weeks on building Y, how can we get actionable results in 2 days?
- Business Z, wants us to attend this event. It's going to cost us - will this change our key success metrics? If not, should we defer?
Start using Frugality in your business today. It has made a huge difference to ours.