Top Ways Startups Waste Money

Brad warns against paying a large-company salary for someone whose productivity may depend on the systems and support of a big tech company. The hosts also caution that replacing one employee with several contractors can bring mismatched incentives and extra coordination. Founders may be better off learning to do unfamiliar work themselves before hiring.

The hosts say large ad budgets can produce customers while teaching founders little about how to grow without paid ads. One founder’s company eventually spent nearly $1 million a month on Facebook ads, then had to cut back when the ads stopped being profitable. They also recommend low-cost, creative ways to reach people at events instead of expensive sponsorships.

The hosts describe paying PR agencies for weak press results and say founders can build direct relationships with journalists. One founder spent about $50,000 on a retainer, then fired the agency and contacted journalists personally before a Series B announcement. On legal work, they advise getting a cost estimate in advance, avoiding unnecessary contract customization, and asking about payment plans to spread large bills.

The hosts question whether paid advisors or equity grants commonly make the difference for startups, and say useful advice often comes freely from investors or domain experts. One founder asked prospective advisors to invest instead, and four did. The hosts say founders should first try low-cost ways to test ideas and spend more after product-market fit, when customers want the product and growth is clearer.