I’m a huge fan of networking events. Firstly, I get to meet like-minded individuals, and secondly, I get to hear how people talk about their businesses.
Here are some common concepts I come across when networking and entrepreneurs talking about their business:
- Getting investors and raising capital seems to be startups top priority
- They should be focused on customers instead of raising capital
Some of these business owners told me that they require a huge capital investment before getting paying clients.
Here’s my take:
It’s possible to bootstrap a capital intensive project by securing contracts upfront before purchasing inventory from: CUSTOMERS.
- You get to validate your idea/ service from paying customers
- You reduce the risk for potential investors
Of course, none of them didn’t like what I had to say. Raising capital is fun. Getting paying clients is difficult. Oh, wait, designing a competitive product is even harder.
Did you know that I bootstrapped my project as an SEO consultant? No office. Just a laptop and time investment.
There’s a lot of lessons you can learn from the show Shark Tank:
‘You guys make people pay you for a proof of concept for two years’. – Mark Cuban
Numbers That Matter
If you’re looking to raise capital, you should be focused on your sales results. Those are numbers that matter. Not the ‘dream’ or the ‘vision’. Facebook likes, press releases etc are often vanity metrics. Note: Mark Cuban did talk about innovating your sales process and SEO of the videos.
The trick here is to validate your product and service way ahead before of time.
- You can do this by pitching to clients way before you invest in inventory or starting a business
- Or you can do some research: The Google keyword planner is one of the best ways to research market demand, along with a multitude of other ways. I teach this in my SEO course.
The majority of businesses fail because they built something that the market isn’t willing to pay for.