Jack Groetzinger, the founder of SeatGeek wrote an article today that puts a unique spin on the cost-cutting focus of many startups. Many founders focused on running a lean startup are focused on minimizing what they view as excess expenditures and, as a result, effectively value their time at $0 / per hour.
For example, if it takes me an hour to get somewhere by bus for $5 and 30 minutes to get somewhere by train for $10, I only save $5 in that half hour by choosing the bus. If my time is worth more than $10 / hour to me (which it is), I maximize my value to my startup by taking the train.
However, it is tough to put a dollar amount on intangibles associated with this decision. For instance, I may choose the bus if the bus better exposes me to other entrepreneurs traveling from Palo Alto to San Francisco that might help my business.
A smart entrepreneur will estimate what their time is worth and the non-dollar impact of their choices and make decisions that maximize their value.
Daniel Liebeskind