As the co-founder of Sesame Labs, which is building MadMen AI, Vinay Jain has navigated the complex waters of startup finances with remarkable skill. It's been a pleasure to work alongside him as an investor, and see firsthand how his strategic approach has enabled Sesame Labs to navigate the changing market environments, including the boom and bust period which happened less than a year apart and a shift in company direction based on where the pull in the market was. Many startups don’t get that opportunity, often making the mistake of scaling their org prematurely prior to product market-fit.
In this article, I'm excited to share some of Vinay's valuable lessons about creating a lean financial operating system for startups, lessons he’s learned over the past several years of starting, growing, pivoting, and adapting as a founder and leader.
These insights are part of our Founder Docs collection, where we've curated wisdom from successful founders to help guide the next generation of entrepreneurs. You can read Vinay’s Founder Docs articles in full, but let’s dig into some of the specific takeaways he shared that will help you get your startup off to a sensible financial start.
The power of regular expense reviews
One of the most crucial lessons Vinay has to share is the importance of keeping a close eye on expenses, even when you're tight on time (as almost all founders are!).
He acknowledges it might be tempting to put financial oversight on the back burner when juggling multiple responsibilities, but neglecting your finances can lead to significant issues down the road: "It's important to establish a regular cadence for reviewing your spending, whether that's biweekly, monthly or quarterly."
The benefits of regular expense review are twofold. First, it helps identify areas of overspending or inefficient resource allocation early on, so you can change course if needed. Second, Vinay says, "Keeping a close eye on your expenses also helps you maintain a lean and agile approach to building your startup."
Regular financial reviews require discipline and attention to detail, but Vinay insists—and I agree—"the payoff is worth the effort." This approach ensures that every dollar works hard for your business, which is crucial in the early stages of a startup when resources are limited.
Read Vinay's full article in our Founder Docs collection for a more in-depth look at his strategies for effective expense management and other financial insights.
Strategic lean hiring: Building your team wisely
Hiring decisions can make or break your startup’s financial strategy, so you must make these moves carefully.
"Salaries tend to be the biggest expense for early-stage startups," Vinay points out, "so it's crucial to be strategic about your hiring decisions." He emphasizes the importance of prioritizing based on your startup's current needs and financial capacity.
Vinay recommends a thoughtful approach to building your team:
- Start with engineering: "Prioritize filling seats with engineering talent first, taking into account the technical prowess of the founders," he advises. This focus ensures you have the technical capability to develop your product effectively.
- Consider product design: If it's a key differentiator for your customers, Vinay suggests investing in product design talent next.
- Time your business hires strategically: "As soon as your product moves from alpha to beta, bring on a businessperson to help figure out GTM and distribution," Vinay recommends. He notes that a skilled person in this role can "significantly accelerate your ability to learn and iterate quickly."
Vinay's approach to hiring is all about balance and timing. He stresses the importance of being "strategic and lean in your hiring decisions, to ensure that each new team member contributes to your startup's growth and success."
Expanding your lean startup toolkit
Vinay Jain’s experience with Sesame Labs and MadMen AI has earned him a wide range of useful lessons that extend beyond what we've covered here.
If you found these tips on expense management and strategic hiring helpful, consider exploring Vinay's other articles in our Founder Docs collection. They cover various aspects of running a lean startup, including recommendations for expenses you can trim. You'll also find advice on the best ways to spend your capital. These resources can provide valuable guidance as you navigate your startup journey.
