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- How overscaling nearly sank a $500M+ exit.
How overscaling nearly sank a $500M+ exit.
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🎥 The mistake Kirk Simpson made at 80 employees that almost cost him Wave
The best advice Kirk Simpson ever got was three words. He learned why the hard way.
Early on, Wave raised from Social Capital, Chamath Palihapitiya's firm. Kirk says you start feeling like the coolest thing since sliced bread, so you scale to 80 employees. Then you realize you've completely overscaled, you have to cut people, and he calls it the worst feeling in the world.
That overscaling helped drag Wave to the brink. By 2015 the company was effectively insolvent. Kirk spent that stretch ducking into an office broom closet to call Silicon Valley Bank and ask them not to pull the venture debt. The hiring spree didn't just dent morale. It nearly cost him the whole company.
The three words came from a sharp early board member: "premature scaling is death."
What he meant is specific. Engineering and product teams want everything rock solid before it ships. But at that point you still don't know if anyone cares, and polishing something before you've proven demand is wasted time at a startup.
This isn't about moving slow. It's about sequence. Get a real signal that customers want it, then scale slower, smarter, more methodical. The version of you that finds product-market fit first never has to make the broom-closet call.
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No theory, no filler. Every answer comes from a founder who's actually done it.
Here's what came back on the one every founder wrestles with:
"How do I get my first customer?"
Ron Spreeuwenberg, Hi Mama / Lillio: Build a list of 50 potential customers, script your interviews, and let those conversations surface who'll actually buy.
"By the time you've interviewed these people you will know if they're an early adopter and might want to actually purchase your product." ▶ Watch
Dr. Fazila Seker, Insight Medbotics: Identify your customer and learn their language before you build anything. The relationship you form becomes your first sale.
"You're developing the relationships with the people who can help you spread the word and likely become some of your first." ▶ Watch
Hongwei Liu, Mappedin: Find a first customer who believes in an imperfect demo. That belief turns into referrals that snowball.
"She became a great sponsor… she referred us to her peers at Maple View."
Noah Dolgoy, Tread: Your first real customer may only appear after you iterate the model. Obsess over client service to find the actual problem.
"We became intense about client service and understanding what was wrong and how to help." ▶ Watch
Upvote the answers that land, it surfaces the best ones for the next founder. And share the ones worth passing on.
Four founders, four paths to the same milestone. Got a harder question? Ask it on AskTechTO.
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