antipattern

Maybe a decade ago, when you finally raised your seed round, it was not that much money. Maybe a few hundred thousand or maybe if you were lucky a million bucks. And we were super careful how to spend that money. Lots of small teams, just figuring things out together.

Looking around today, I noticed things have changed. A lot.

Now it seems that a seed round of $5M is a common occurrence. For a stealth startup that is still supposed to figure stuff out. With no proven business model at all yet.

OK, if you have so much money, what is your absolute first though? Let me think about that for 2 seconds ...

Hell yeah, lets vacuum up as many engineers as we can find! Lets get a recruiter and go bananas!

So now I keep on running into startups that nobody has heard of at all, and they have these huge teams. And honestly I cannot figure it out. Do they really need all those engineers already? They are not making any money, are they?

If things don't work out on the business side, as they tend to do 95% of the time, and your investors don't return your calls any more (don't tell me that does not happen), what do you think is going to happen with your team of 30 or more engineers? Its like you are running at maximum velocity towards a wall. Its going to be a spectacular event.

There used to be a rule of thumb called no-premature-scaling. What happened?