I see this argument a lot. Then most startups use that time to create rushed half-assed features instead of spending a week on their db that'll end up saving hundreds of thousands of dollars. Forever.
Startups are in the job of earning millions. If they can spend $100k on a managed DB now and just spend every braincell on getting their product right, it's a win for their investors.
That mentality is working wonders right now, isn't it?
Hundreds of dead startups because after all that unnecessary spending, they still have unnecessary buggy software that got sold to other startups that, when push comes to shove, will cut spending in those same startups that offer half-baked buggy products.
What you say is definitely what they preach. But I don't agree or see that as a good logic.
Way too many startup founders decide to build shitty products with short-sighted solutions like these, following whatever is trendy (crypto, AI, etc) because investors advise them to. Guess what: the investor doesn't care about creating a good business. He wants a unicorn. So they advise them to make all-or-nothing moves knowing it will most likely kill the startup.
It's definitely "a strategy". But I think it's short-sighted as hell.
That's the whole point of startups and VC: not spending money on safe investments that provide a 10% return, but spending large amounts of money on risky investments that provide, when averaged together (rare unicorns on top of a mound of dead startups), a 20% return. Both numbers completely arbitrary, of course.
Isn't this only the latest definition of "startup"? What exactly defines a startup? Is it growth at all costs? Is it reckless spending? Complete focus on short-term gains? Something else?
These investment rounds are only there to provide money to start. Unless the founders sign away the control of their company to investors, they are still at the helm of the ship. They can choose how they will approach growth.
We can see how the entire scene is gearing towards profitability now that the money dried up, so this growth focus is no longer the only game in town.
You can still take investments and accelerate growth without having to recklessly go all-in. But I've never taken VC money. Maybe that's baked into the contracts?
For me that's short-sighted.