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Why Canadian Startups need to raise less and hustle more

Why Canadian Startups need to raise less and hustle more

Posted by PanamericanWorld on March 14, 2016

If there’s one story that Ron Spreeuwenberg wants startups to remember, it’s the stories of Flooz and Beenz. The companies, best known as predecessors to Bitcoin, burned through $50 million and $100 million respectively mostly because of premature scaling. 

“They’re a classic example of how you can waste money really easily. Flooz spent $8 million on an ad with Whoopi Goldberg,” he said. “You need to be very careful about minimizing waste and de-risking early on.” 

Spreeuwenberg is the founder of Hi Mama, an app that helps working parents stay connected to their children in child care programs; it’s currently the top rated app for child care programs. For the fellow founders at TechToronto, Spreeuwenberg talked about how to make startups work on a shoestring budget.

Spreeuwenberg cited a CB Insights report that named a lack of market need as the top reason that startups fail. “You have to de-risk early on. Dont waste $8 million on advertising early on,” he said.

Spreeuwenberg argued that startups also need to concentrate more on hustling and less on trying to get into TechCrunch at launch; Airbnb made its first $30,000 from selling cereal and literally knocked on doors to get their site started.

“Airbnb started at SXSW and got an amazing two sign ups to their website. And they’re worth $20 billion now so obviously no one cares if your launch sucks,” he said. “The co-founders went and knocked on doors in New York to take photos for listing on their site, which ended up being a massive booking opportunity. They would never have figured it out if they hadn’t literally knocked on doors.”

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