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Old Mistakes And New Growth
You need paying customers before launching a product, building a website, or choosing a company name.
My last company failed spectacularly. This was after having two successful exits. However, the mistakes made became excellent teachers in ensuring growth for all future endeavors. Here is what I learned:
1. No team is better than a bad one
In the past, I chose co-founders based on talent. This was a mistake. Instead, a founding team should be based on commitment. Talent can be purchased, but commitment cannot.
2. Paying customers is a must from day one
You need paying customers before launching a product, building a website, or choosing a company name. With them, you have an unproven idea.
3. Technology is not needed until it is time to scale
Until you have proven product market fit through paying customers, no discussion on scaling should be made. This includes automation software, CRM subscriptions, and even accounting software.
4. Speaking engagements bring the fastest growth
Speaking to your target market is the fastest way to reach new customers. To avoid being confused with pitch competitions, I am referring to giving a talk to a group of interested people. Trade shows, Meetups, and organizations provide the best opportunities for this.
5. Goals are more important than financial models
A financial model is only necessary once enough sales are made to have a realistic view of the market's response. Until then, short-term revenue goals are the most important thing.
6. Bold is better than fitting in
The company name, messaging, and even how you dress at events must be different. Most startups have easily forgotten names, founders that look like their peers, and less-than-amazing products.
7. Cash flow is critical
Without consistent revenue, your business is terminal. It may have weeks, months, or even years, but there is a pre-assigned death date. Once cash flow occurs, that death date becomes further out into the future, giving more life to your endeavor.
Conclusion
The best lesson I discovered is that finding paying customers is the founding team's first and most critical job. Until then, no one should leave their employment, launch a website, or build a product. While not exciting, cold calling is the best way to discover product-market fit.
Hope this helps
- Todd
I desire to help companies scale with investment, advice, and support. If you need help, have a question, or are seeking funding, email me at toddm@banananomics.co.
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