Matt Paulson says founders with $1 million revenue scale expenses too fast and keep paying for things that don't work, like underperforming ads. He recommends auditing every recurring cost quarterly, especially SaaS subscriptions on autopay, to cut what isn't pulling its weight.
What would you say is the biggest financial mistake that you see first-time founders make once they start getting that real revenue in their business?
Yeah, and I'll say real revenue is maybe about $1 million a year, at least for the purposes of this question. I think people often, especially when you're venture capital funded, you scale up your expenses really quickly. You try a bunch of stuff, but then if something doesn't work, you let it run too long without cutting it. I'm on the board of a media company, and they were trying Facebook ads, and Facebook ads just weren't working for them. It's like, okay, they let it run for 3 months, and we should have just cut it off because it wasn't working. So really just auditing your expenses on a regular basis, every quarter looking through every expense saying, should we still pay for this? There are so many subscriptions and SaaS things that are on autopilot these days. You really have to be proactive about looking at your expenses and cutting stuff.
