The Dream Tax: Why Rushing To Scale Can Drain Startups
There's a particular kind of pressure that founders feel to scale quickly. VCs talk about hockey-stick growth. Twitter is full of stories about companies going from zero to millions in months. It's intoxicating.
But I've learned something from building and selling three companies: premature scaling is one of the most expensive mistakes you can make.
The Dream Tax
I call it the "dream tax" — the cost of building for a future that hasn't arrived yet. It manifests in many ways:
- Hiring ahead of revenue
- Building features for imaginary users
- Choosing expensive infrastructure "for scale"
- Spending on brand before product-market fit
What Actually Matters
In my experience, the companies that succeed focus on:
- Solving a real problem — Not an imagined one
- Getting paying customers quickly — Revenue validates everything
- Staying lean — Every dollar saved is runway extended
- Building relationships — Your first 100 users are more valuable than your next 10,000
A Personal Example
With BazaarTracker, I built the MVP while working a 6-day-a-week job. No fancy infrastructure. No team. Just solving a problem I personally had.
It grew organically because it solved a real problem. And it got acquired within a year.
Scale will come if you're building something people want. Don't pay the dream tax before you've earned the dream.