Does Big Funding Slow down Start-up's Pace of Innovation?


2. All the Excuses to Fix Broken Shit Are Gone

Before getting the money when money is everything for a start-up, entrepreneurs ignore everything else which does not directly generate revenue. These include building functional analytics, crafting internal documentation and investing in hardware. After the funding, the excuses for not spending in these things vanish. So they are now able to earn the prioritization they deserved and hence affecting the growth rate.

3. Building for Scale and Stability Takes Longer

Before funding, a start-up develops features to withstand a few dozen to a couple hundred simultaneous users. But later it has to develop for thousands and thousands of users keeping a couple of years in mind, which leaves less space for innovation.

4. “Lean” Development Becomes Irresponsible

A start-up can’t ask just a few users what they think – it needs to know that a product they’re building that could take 6+ months to develop and use 15-25% of the team’s talent is the right one. Product/market fit is no longer the goal after getting funded. The new product development and research cycle is longer, and leaving barely-working products live actually destroys brand value.