Why Use a GPS When a Compass Will Do?

Blue metal compass isolated on white backgroundI guess the corollary to this could be “don’t use a compass when the precision of a GPS is needed”.  In fact, the main point is to use the best tool for the job at the time.  If you need to move fast and just want to make sure you’re directionally correct, then a compass is perfect.  With plus/minus a few degrees of precision, you can quickly set off in the right general direction.  In fact, I wrote an article on this exact topic titled “An Unfair Advantage All Startups Have Against Big Companies“.  Same for things like estimating your TAM/SAM market size (does it matter if it’s $3.2B versus $3.3B?), estimating salaries for new hires over the coming year and the like.

The analogy of using a compass is ideal for times when speed and flexibility are more important than precision.  In other words, make sure to use a GPS instead for things like revenue recognition and your investor capitalization table – where precision is mandatory.

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Author: Gordon Daugherty

Over the past 15 years Gordon has seen more than 1,500 startup pitches, given personal advice to more than 500 entrepreneurs and been involved with raising over $45M in growth and venture capital. Throughout his 28 year career in high tech, Gordon has two IPO’s and a $200M acquisition exit under his belt. Now, through his advisory practice called Shockwave Innovations and as Managing Director for Austin’s Capital Factory startup accelerator, Gordon’s focus is purely on educating, advising and investing in tech startups.

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