Growing organically: who needs startup capital?

25 01 2008

Joel Spolsky authored a great article in this month’s issue of Inc. entitled The Four Pillars of Organic Growth, which describes the benefits of (you guessed it) growing organically, and the perils of mis-using outside investments to grow too quickly. The timing of the article was great considering my recent option of entering a business plan competition. As a side note, I’ve decided to defer on that option for the time being and focus on getting the next release of ClimbPoint out. But back to the article…Here’s the summary quote:

“A company that lands a big investment too early is often worse off, not better. It often finds itself in a situation where it is much harder to make that investment pay off.”

Spolsky goes on to recount how many companies today (and I would say that VCs and the startup culture perpetuate this) rely on large outside investments to fuel fast growth. Now, I don’t believe that all outside investment is detrimental to budding startups, but I do agree with the primary point of the article, which is that startups should regulate growth so that revenue, head count, PR, and quality grow at approximately the same rate.

To this point I think I have experienced organic growth with ClimbPoint. I’ve only contacted about a handful of people about demoing the software, and already a few more have come on board via word of mouth or the Googlebot. One of the other marks of an organically growing company, according to Spolsky, is that “the degree to which customers are aware of your business never outstrips the quality of the goods or services you are able to provide to them.”

I think that accurately describes where I’m at now, and for the time being I’m fine with word of mouth publicity. In fact, I don’t expect to begin marketing my climbing wall management software for another few months — and even then, I’ll be targeting specific groups so that I can be sure to maintain quality and ensure that it serves the needs of the climbing community.

While it would be nice to have some extra startup capital, I am content to grow slowly and organically. After all, getting there is half the fun right?

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