After every raise I have been involved in, I treat each dollar as if it was a million. Don’t forget the blood, sweat and tears that went into securing your funding. Spending wisely is critical. It is all about inflection points. Ask yourself, what do I need to get to my next inflection point that will create more value. The typical inflection points I see are:
Minimum viable product (MVP)
Beta customer completion (sometimes paying)
Growing the number of paying customers to prove product market fit
Customers renewing
Increasing margins
Scaling sales with a team, not just founder sales
Proof of your customer acquisition cost and effective marketing plan
I believe it is important to define the inflection point you are working towards and create your hypothesis on how you will get there and a budget. The goal is to have a solid plan the team is working towards and measurement capability once you get there. Measure results monthly to determine if you are on track. This will help you to plan better in the future, understand where you were spot on and where you need to be more conservative.
Some things you probably do not need to get to your next inflection point:
A big fancy office in a post covid world
Hiring until you really need another resource (more blogs coming on this)
Hiring your friend that needs a job that does not fit your needs
The Cadillac version of your product, start with the minimum viable product (MVP)
What is your next inflection point?