This CFO reveals 5 cost-saving tricks for startups

Photo credit: Artem Bali

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Our consulting business has been growing with the increased demand for startup troubleshooting. While this is fantastic for our business, it paints a gloomy picture for the whole startup scene.

Today, I’ll continue my previous article, answering a few more frequently asked questions from the startups we’ve worked with.

Is it a good idea to join competitions?

I responded to this in my previous article, but it’s worth further discussion.

Joining competitions during your ideation stage can be a great sounding board for business ideas. With experienced panelists that can verify your idea, it’s a good way to fine-tune the areas you haven’t given much thought on.

But preparing pitch decks, elevator pitches, and all the theatrics can take up a huge chunk of your time. At the ideation phase, this is fine since the operational costs at this point are still low. But once you start incurring costs, joining competitions might not be worth the time spent on preparing for them, as you could better spend this time actually working on your startup.

Focus on the business rather than win competitions. The cups and medals you collect from joining competitions can’t be turned into cash for additional runway. Instead of pitching, consider doing more market tests and research.

Are glamorous events and parties a good investment?

I was quite surprised that some of our startup clients were spending so much on events and parties as part of their PR and marketing strategies. It would appear that a lot of them still think these are a great tour de force.

While it’s true that these events can boost PR and a company’s go-to-market positioning, hosting these events can be obviously expensive. Do away with parties and invest the money on targeted marketing. If you need to go out for a few drinks with clients, just go out and buy a few bottles.

Typically, I set the hurdle for hosting events and parties at a potential return of 10x the spending. If the initial impact projection of such events wouldn’t even exceed a potential return of 10x, it’s much better to adopt other go-to-market strategies.

Are we overheating our talent supply?

One of the most challenging tasks that human resources people face is finding the sweet spot between talent acquisition and retention—more so if your startup is struggling to find the right people to join your team.

Usually, talent acquisition ends in two ways: excessive headcount or unfit recruits. While we startup founders tend to be extremely generous to our talents, it’s important to strike a balance between output, growth, and kindness.

The buzzword in talent acquisition these days is “output-based.” This means that companies focus on talent productivity rather than the number of hours clocked in per day. While this is ideal, there needs to be a measure of productivity. For output-based strategies, productivity is measured through “utilization,” which means the number of hours worked on role-related work.

Should I invest in a cool office like Google?

Is renting a high-end address worth it?