The last year has been tough for startups. Very tough. Investors are not investing and customers are hard to find. We all need cash – but where to find it: investors or customers? Is it chicken or egg? Unfortunately not. For nearly all startups the answer is simple - CUSTOMERS come first. Unless you need a specific lump of startup investment for capital expenditure or run a very well thought out freemium model, initial funding will come from your savings, or support from your family – but your ongoing survival will solely depend on customer sales and receipts. Preferably even covering your costs. Monthly customer receipts to cover monthly costs. Now there’s a neat idea. And forget bank loans – they’re too busy financing their bonuses right now. So no time for that startup lending. What many (first time) entrepreneurs fail to understand is that getting investors is way harder than getting customers and if you have no customers getting investors is even harder. When we’re in a recession/depression/f***ed investors are no where to be found. Finding paying customers and looking after them is the only sustainable model – so the sooner you get there the sooner you’ll sleep at night. Have confidence in yourself, your product or service and figure how to repeatedly recruit and develop buyers – then suss out how to scale that. Grow through your own cash flow. That’s the real adrenaline rush. Spend every minute of every day and some worrying about customers and cash receipts – not dreaming up fund raising schemes. Capital raising may well be the biggest red herring known to entrepreneur. Figure.
Leave a Reply