29:07The Right (And Wrong) Way To Spend Money At Your Startup
From Y Combinator · Published Jul 20, 2025 · Watch on YouTube
TL;DR
Pre-product-market-fit (PMF) money buys only time, not growth; founders must minimize spend to maximize runway and iterations. Post-PMF, money can fuel growth through measured hires (sales, support) but should never be used to “look like a big company” (offices, branding agencies, ads).
Key insights
- Pre-PMF, the only goal is finding product-market fit; money cannot help with that, only time. Every increase in burn decreases the runway needed for multiple pivots and fundraising attempts.
- Post-PMF, money can buy growth, but only if spent on measurable, revenue-positive activities. Hiring salespeople and support is appropriate only when inbound overwhelms the founder.
- Revenue per employee should increase over time; if it doesn’t, the company is over-hiring relative to growth.
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