9 Women Can’t Make a Baby in a Month

Editor’s Note: This is a guest post by Mark Suster ( @msuster ), a 2x entrepreneur, now VC at GRP Partners . Read more about Suster at Bothsidesofthetable I'm a very big proponent of the "lean startup movement" as espoused by Steve Blank & Eric Ries . The part of the movement that resonates the most with me is that entrepreneurs should keep their capital expenditures really low while they're experimenting with their product and determining whether there is a large market for what they do. In the initial phases of any new market you're developing a product, getting feedback from customers, refining your product based on user feedback and then re-launching your product. Rinse & repeat. Nobody really knows whether or not the idea is yet going to be big, so I believe in not over capitalizing too early. This benefits you, the entrepreneur. It's the whole basis of my investment philosophy, which I call " The Entrepreneur Thesis ." I believe that over capitalizing companies too early often favors the VC. It takes options off of the table. It produces only one kind of outcome. It drives perverse incentives. In the late 90's I saw a dangerous trend creeping into the startup world, which was that companies were suddenly raising huge amounts of money too early in their existence. It seemed to be purely speculative. It's not clear that there was big customer demand for some of these products yet entrepreneurs were egged on by VCs to "take the money" and try and push the market. Here's what those VCs (and us entrepreneurs, myself included) didn't understand: 9 women can't make a baby in a month . Here's why ...