I have had the luxury of meeting over 500 startups at Red Rocket over the last three years. And, typically, most of them approach me at the same point in their startup development. They have just finished building their new product, whether it be a website or mobile app or whatever, and they are seeking venture capital to assist them with sales and marketing to bring in new users. It is typically then, when I ask them “do you have any current users and how quickly are you growing” to point to a proof-of-concept around your startup. Which is typically followed by, “I don’t have a material user base yet, that is why I need the venture capital”. Then I shrug, and have to be the “bad guy” of telling them they are not ready to raise professional venture capital. A sad and familiar story, as without this round of capital, the startup will most likely go out of business, as they lack other sources.
But, why is this the same old story? In my opinion, it is because entrepreneurs are so focused on their product, with their heads down coding away on some cool technology feature or functionality, that they don’t think far enough ahead to what will keep their business funded. Yes, many product-driven disciples will say, “if you build a great product, users will come”. And, they are right. But, the question is: by when?
Read the rest of the this post in Forbes, which I guest authored this week.
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