Why You Need to Know Why You’re Growing Well

One of the more ‘advanced’ mistakes I see founders make is to stop asking questions about their business when it’s doing well on a purely superficial topline basis. It’s very tempting to fall into this trap after years of cash flow hiccups, working capital problems, and slow progress. 

But when things take off is precisely when you should understand why this is so. 

It’s this why the behavioral story behind your business, that can help you isolate which parts of your 4P playbook are responsible for the success and which can be jettisoned, freeing up cash to deploy in the tactics that will sustain exponential growth. 

For undercapitalized startups using modest amounts of external capital to fuel growth, it’s critical not to squander capital on execution that hasn’t been doing anything so far. And it’s vital to double down spending on the executional areas responsible for the current growth, especially as the business enters new geographies to keep the development humming.  Knowing ‘why’ you’re growing well isn’t an academic exercise. It’s an exercise in maximizing capital efficiency. It’s good to finance. And it could just mean the difference between you making it up the Ramp and a me-too peer flounder.