To model or to build?

Founders sometimes ask me:

"Should I build a financial model before I launch?"

Here’s my take:

​
You build the model to test one big question:

Could this business ever be profitable under reasonable assumptions?

But you run the business to figure out if those assumptions are even in the ballpark.

My vote?

Build the smallest, scrappiest MVP imaginable,

See if anyone bites,

-> Then build the model.

Then, when you're building the model, don't start it on January of next year,

Start it as of last month.

And portray an accurate picture of where you are today

And a reasonable path to where you'd like to go.

That way, you’re not just dreaming up a business that could work—

You’re validating one

That already is.

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