Startups on the racetrack

I’ve been thinking  about driving a Caterham 7 as an analogy for running a startup:

It has a very high power to weight ratio with rear wheel drive

It’s quicker over short distances than most racing cars

It’s most effective when travelling in a straight line with aggressive acceleration

It loses most of its effectiveness if you try to turn at any kind of speed and can easily spin out of control and crash

When the next corner arrives you need to slow down steadily, concentrate, turn tightly and get the car pointing in the direction you need to go next as quickly as possible ie. get the back (product) out

Then put your foot flat

About kd_uk
Investor and corporate finance advisor

2 Responses to Startups on the racetrack

  1. Simon Harris says:

    I think you’ll find that the Caterham 7 is front-engined and rear drive. That means that its traction can easily be lost by a heavy-footed driver, resulting in the popular “donut” manoeuvre http://www.youtube.com/watch?v=IB5FnyYTBm0 . The skilled entrepreneur should use his throttle (cash) sparingly to avoid spinning his wheels (wasting his investors’ cash). A better analogy might be a Porsche 911 (a not-so-new for less than £20k) whose engine, being behind the rear wheels, provides outstanding traction under full power.

    Simon Harris

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