Reinvest Before Rewarding Yourself
Principle
In the early compounding phase, the business should usually eat before the founder lifestyle does.
Why it matters
Every dollar pulled out early has opportunity cost. Founder rewards become safer when the company is large enough to both reinvest aggressively and support personal spending.
How to use it
- Ask whether the current bottleneck is market/customer learning or optimization.
- Prefer fast learning when the decision is reversible or cheaply correctable.
- Slow down when mistakes are existential: quality, financing, inventory risk, executive hires, or reputation-damaging moves.