Fat Startups, BMI and The Lorax
So, there I was hanging out in Denver airport again, reading the back-and-forth between Ben Horowitz and Fred Wilson on fat versus thin startups. They’re both cats that I respect and I think they both make carefully reasoned, nuanced arguments that have far more depth than a quick summary can articulate. But all this talk of heft got me thinking about the Body Mass Index. Those hip to the BMI calculation know that it's a measure of weight relative to height. Doctors tend to be fans because it's a decent indicator of body fat which correlates with increased risk of morbidity and mortality. And BMI tends to work pretty well, except when it doesn't. For example, serious athletes tend to have more muscle per unit of height than the rest of us and thus have unusually high BMIs: Arnold Schwarzenegger's BMI clocks in at 33 (the "ideal weight range" runs from 18.5 to 24.9). Even George Clooney clocks in at 29, just shy of the "obese" cutoff of 29.9. The beauty of muscle, though, is that it's so much more metabolically active than fat. That's why one can be heavy, but fit; the two are not mutually exclusive. And neither, necessarily, are capital efficiency and cash abundance in the startup world. Indeed, while I do find myself more firmly in Fred's "lean" camp, I am sympathetic to the notion that sometimes a company with a lot of dollars on hand can pivot more quickly as business conditions change, or scale faster to discourage new entrants or build competitive advantages that give them a leg up on existing rivals. Companies can be well-funded but hungry. I get it.
