Being a first-time startup founder is confusing. You don’t have the experience to know what a startup needs to grow nicely and start printing cash – at least I know I didn’t. But since my first startup I’ve learned how to lay the groundwork for future success in an early stage startup.
The most important thing early-on is selling before you’re ready to sell.
After coming up with my first “golden” startup idea, I did what most first-time founders do. I spent a lot of time daydreaming and planning a perfect product that I “had to” build, and calculating how much money I’d have to spend – obviously coming up with amounts beyond my budget.
I thought that removing budget obstacles was the only way to create something sellable. So I spent a lot of time knocking on VC’s doors, which seemed to be the only path. But my product wasn’t insanely hard to develop, and I could’ve bootstrapped an mvp or a simulation on my own to start selling it. Why didn’t I just do that?
Your products will never be 100% ideal, and something will always stand in the way of your startup’s growth.
Not having a perfect (or even half-made) product is no reason not to sell. It’s well within your power to deal with obstacles or go around them to start selling and validating your idea – more details about how to get leads.
“Not ready to sell” is a lie
I grew RightHello using whatever resources I had (a fancy term for this is bootstrapping) and postponed outside financing until I needed it. With good execution, your business idea can start generating revenue early-on too.
This gives you alternatives in the future. In later stages of growth, you’ll have a choice whether to continue developing your business organically, or boost growth with outside financing. But first you need to know whether your idea makes sense.
Starting RightHello I had many ideas for boosting B2B Sales, but didn’t know if they were reasonable from a potential customer’s perspective. So I started digging around to get this knowledge.
I defined a basic customer profile to start conducting customer interviews. I reached out to my closest network of friends and colleagues, and if they weren’t interested themselves I asked for referrals. I also cold emailed companies that fit my customer profile, because it provided me with first business contacts to talk to without investing in marketing yet. I did all this to get 20 interviews lined up.
My focus in those interviews was to:
- validate the problem (asking about customer pains)
- validate the solution (offering several variations of it)
The final validation is whether people are willing to pay you (put a price on your solution and ask if they would buy it). If you want to learn more about customer interviews, go to Justin Wilcox’s blog.
At the end of the process, 4 out of the 20 people that I interviewed became RightHello’s first customer straight away.
No obstacle can stop you if you improvise
To make your idea a reality and test if it’s sellable, all you need is to get a general idea of what your target customers need. Early-stage RightHello didn’t have the software, the team and the expertise we have now, but:
- we improvised and developed homemade processes to deliver what our customers needed
- I made moves to make our team larger and put product development on the right track
So we had a working mvp of our solution, and I was developing the our future sales process from scratch by doing everything in my might to keep acquiring new customers. We had a sellable solution, roadmaps for future development, knowledge of our target market and paying clients – I had a lot to show if I wanted to talk to VCs. And I did come around to it, but that decision came out of a need to boost growth, not to jumpstart it, since RightHello was already generating revenue.
Going to VCs early-on without all of this, I would’ve been in a much worse position to negotiate financing terms.
Outside financing is a way to boost development of an already tested, viable solution. It’s not necessarily easier to have VC financing from the start – before you even secure it for an early stage startup, you might lose sight of your startup’s main goals.
Bootstrapping your startup early on will make for better negotiations with VCs when you decide to acquire financing. Do it when you already have a viable solution, you know it’s sellable, and there’s obvious potential for growth. If you aren’t sure of these things, you probably won’t get backed by VCs anyway.
So stop whining that you’re not ready, and start selling!