Early Growth Allocation
Monthly checkpoint to match allocation to survival phase. Pre-PMF: 40-50% to product. Post-PMF: shift to acquisition. Top performers burn <1.0x; median burns 1.6x (slow death).
Soybean seedlings face a critical resource allocation decision in their first 7-10 days: how much energy to draw from cotyledon reserves versus investing in photosynthetic capacity. Research shows the majority of stored reserves are mobilized within 8-9 days after germination. Lose both cotyledons during this window and yields drop 5-10%; wait too long to develop true leaves, and the seedling depletes reserves before achieving autotrophy. Bean and sunflower seedlings face the same trade-off with varying reserve sizes. Early-stage startups face identical math. Seed funding functions as cotyledon reserves: finite capital that must fuel development until the company achieves sustainable revenue (photosynthetic independence). Top-performing startups (top 10%) maintain burn multiples below 1.0x and target 24-30 months runway. The median startup burns $1.60 for every $1 in new ARR—that's a slow death. Slack demonstrated optimal allocation shifts: pre-IPO burn of $97M on $600M+ ARR (≈1.2x burn multiple), while shifting resource allocation from self-serve toward enterprise—22% of revenue from $100k+ deals in 2017, 40%+ by IPO. The Early Growth Allocation framework provides a monthly checkpoint to ensure resources flow to the right priorities at the right time. Pre-product-market-fit, 40-50% should go to product development; post-PMF, allocation shifts toward customer acquisition. The framework catches the two fatal errors: scaling before PMF (trying to grow before developing true leaves) and over-investing in infrastructure (thick stems, weak roots).
When to Use Early Growth Allocation
Run monthly during years 1-4 to ensure resource allocation matches your survival phase. Deploy when runway drops below 18 months to identify reallocation opportunities. Use when preparing board updates to demonstrate allocation discipline. Apply when founders disagree about priorities—the framework provides an objective arbitration structure tied to biological survival logic. See also: The Survival Sprint for crisis triage, Five Survival Checkpoints for health assessment.
How to Apply
Record Current State
Document runway remaining and current phase. Like tracking cotyledon depletion rate, this establishes how much stored energy remains. Phase 1 (0-6 months): pure cotyledon dependency. Phase 2 (6-12 months): transition period, true leaves emerging. Phase 3 (12-24 months): should be approaching autotrophy.
Questions to Ask
- What is current monthly burn rate?
- How many months of runway remain?
- Are you pre-PMF, at PMF, or post-PMF?
- What percentage of expenses are covered by revenue?
Outputs
- Runway in months
- Burn multiple (burn / new ARR)
- Phase classification (1/2/3)
Calculate Current Allocation
Map resource flow to the four growth functions. Product/Engineering is root development—the foundation. Customer Acquisition is leaf expansion—capturing energy. Infrastructure is stem growth—supporting scale. G&A is maintenance metabolism—necessary but not growth-producing.
Questions to Ask
- What % goes to Product/Engineering? (Target: 40-50% pre-PMF)
- What % goes to Customer Acquisition? (Target: 20-30% pre-PMF, 30-40% post-PMF)
- What % goes to Infrastructure? (Target: 20-30%)
- What % goes to G&A? (Target: <20%)
Outputs
- Allocation percentages by category
- Variance from targets
- Trend vs. previous month
Reality Check Questions
Five diagnostic questions that catch the most common allocation errors. These mirror the checks a seedling's growth regulation system performs: Is stored energy being converted to growth? Are defenses adequate? Is the limiting resource being addressed?
Questions to Ask
- Are you over-investing in growth before achieving PMF?
- Are you starving product quality to chase growth metrics?
- Do you have 6+ months runway buffer?
- Is >50% of spend building durable competitive advantage?
- Can you explain your strategy clearly to any team member?
Outputs
- Pass/fail on each check
- Red flags requiring immediate attention
Identify Limiting Factor
Liebig's Law of the Minimum: growth is limited by the scarcest resource, not the total. Identify which single constraint most limits growth this month. All resources beyond what's needed to address the limiting factor are wasted.
Questions to Ask
- Is product quality the bottleneck (users churning, poor NPS)?
- Is customer acquisition the bottleneck (product-market fit achieved but can't scale)?
- Is infrastructure the bottleneck (systems breaking under load)?
- Is runway the bottleneck (decisions driven by cash preservation)?
- Is team capacity the bottleneck (opportunities missed due to headcount)?
Outputs
- Single limiting factor identified
- Resources required to address it
Plan Adjustments
Based on limiting factor, reallocate resources for the next month. Document specific changes and expected outcomes. Like seedlings adjusting root-to-shoot ratio based on light and water availability, your allocation should respond to environmental feedback.
Questions to Ask
- What allocation change will most directly address the limiting factor?
- What will you reduce to fund the increase?
- What metric will indicate the change is working?
- When will you reassess (next monthly review)?
Outputs
- Specific allocation changes
- Success metrics
- Next review date