Assume that each funding dollar you receive will be the last you'll ever get. It’s a strategic mindset that seems antithetical to the way that most companies operate.
“It doesn’t totally jive with the Silicon Valley mentality of ‘swing for the fences,’” Lyft CEO Logan Green told Inc.-- i.e. companies make goals based on the assumption more money will always be coming. He added that thinking beyond one round of funding creates artificial milestones you have to hit, which can be counterproductive.
Today, Green runs his company with this philosophy. And Lyft, mobile on-demand ride-sharing company, has gained tangible momentum. The company, which reportedly facilitates 30,000 rides per week, recently raised $60 million in a Series C round led by Andreessen Horowtiz.
But like most entrepreneurs, he learned this philosophy the hard way via his first company, called Zimride, an online carpool finder.
Green and co-founder John Zimmer started Zimride in 2007. The duo got $30,000 in seed money from an angel investor. They slowly built a pretty solid enterprise business, selling their ride connecting network to universities and companies whose students and employees used the service. It later received a $250,000 grant through Facebook’s fbFund. And, in 2011, Zimride finally broke even -- but it still hadn’t experienced any significant growth.
Along the way, Green said he had to resist taking higher amounts of investment money from VCs that wanted him to change the business' strategy -- to grow bigger, faster. He viewed this as somewhat dangerous -- and a good way to quickly burn through money.
“I think it takes a lot more time than most people expect to get the formula right. And we never wanted to expect that we were going to get the formula right in the next six months.” Green said.
In March, TechCrunch reported that Lyft sold Zimride assets to Enterprise Holdings. Since its launch in 2012, Green has been primarily focused on growing Lyft.
“Swinging for the fences is great, and that’s ultimately what we were able to do when we launched Lyft,” Green said.
He added, “When you swing for the fences in the beginning, there’s a really high likelihood that you’ll run your company into the ground.”