Grow fast, or grow on your own money?
Investor money buys speed. Your own money buys control.
Strategy
Blitzscaling
Speed first, profit later.
Grow as fast as possible, even at a loss, to win a market before rivals arrive. Speed over efficiency, on purpose.
- Right when
- When the market goes to whoever gets biggest first, usually because of network effects, and second place gets very little.
- For example
- Ride-hailing apps spent heavily on discounts for riders and bonuses for drivers. More drivers meant shorter waits, which brought more riders. In each city, being second was worth far less than being first.
- Wrong when
- When there’s no winner-takes-most prize, and the losses just buy customers who leave when the discounts stop.
Money
Bootstrapping
Grow only as fast as you earn.
Growing a business on its own earnings, with no outside investors. Slower, but every rupee is yours and nobody can rush you.
- Right when
- When customers pay from day one and growth doesn’t have to be a race. Every rupee earned is proof the business works.
- For example
- Zoho, the Chennai software company, has grown since 1996 without outside investors, and built a global business on its own earnings.
- Wrong when
- When a funded rival grabs the market while you’re still growing carefully.
What decides it
Does the biggest player take most of the market?
Speed is worth paying for only when size itself is the prize: network effects, scale, a market where the winner takes most. Everywhere else, growing on your own earnings is slower, cheaper and much harder to kill.
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