Hello HN,<p>That was always a question for me, where do startups spend $100k or $1M of their funding?
How much money does a web-startup need to be determined it's successful or not?
The word "startup" means you're looking at a company that hasn't found its business model (which can scale) yet - at least that's how I interpret it. Important to clarify this first.<p>As a startup, money should only be spent on making sure that the product and vision are geared towards solving a problem that a lot of people have. If your product isn't solving a problem, then you can spend more of your cash on trying to figure that out in iterations. If a company is iterating in this customer discovery phase then their burn rate should be fairly low.<p>Once you're convinced that your product resonates with your intended customers (i.e. people have paid you, signed up, or some other KPI has sufficient momentum) then you can start to spend to accelerate marketing and sales in order to "fill the sales funnel". This spending is usually through hires, paid clicks, other advertising and PR.<p>Spending to accelerate marketing and sales prior to ensuring that your product solves an important problem for a lot of people is a great way to blow through your $1m or more.<p>In summary, great founders spend their seed money making sure that they have their product aligned with a bit/important problem, then once that is found they spend to accelerate marketing and sales.
If you're looking for a short answer, startups spend most of their money on people. And rightfully so. At such an early stage, the only assets that really count are human.
On the execution of an idea that provides something that people want and are willing to pay for.<p>So, you're question is really "How do you define 'Execution of an idea, and how do you fund that":<p>You'll need an idea with capable skill behind it. The skills you need will evolve with the idea and the % of execution performed.<p>At times you will need development, infrastructure, sales and administration.<p>Development is the team to execute on the feeatures your idea needs to keep users engaged/paying.<p>Infrastructure is needed initially/at scale in different forms, factors and frequencies.<p>Sales is getting people to know about use and pay for your idea.<p>Administration (I am using generically) to include all the activities that support the above. Rent, HR, Marketing (though this can also go into Sales)<p>So, you need to have a somewhat solid understanding of the above as it relates to your idea and where you are in the process of building a company.<p>A very very early startup is going to spend most on, intially development and infrastructure, then on sales, then on admin, then cycling back to the other areas as needed.<p>Hopefully you do NOT wind up with a resource sink such as legal battles, poor investments on non-contributors etc...