Far too many startup founders are guilty of being so focused on landing that first major funding round that they forget they’re supposed to be running a business and should be prioritizing revenues above all else. That’s just one of the home truths spelled out by Tatiana Livesey & Diana Isac, cofounders of The Winerist, a platform for booking wine tasting tours, in a new post over at Medium.
The central point of Livesey’s and Isac’s article is that most startups fail, and they do so for the same reasons – they spend so much time chasing investors and attending events that they fail to build a profitable and sustainable business, and ultimately run out of time as financing proves to be elusive, time and time again.
Livesey and Isac, who’re based in the U.K., say the biggest mistake many founders make is they attend literally hundreds of startup events in the vain hope of landing that one, big investor. Unfortunately for them, such events are usually attended by the same people over and over again – the same startups pitching the same boring ideas, and the same disinterested investors who inevitably leave without making any commitment.
The authors suggest that startup founders would be better off not going to such events at all – unless, of course, they have a specific investor in mind who can not only help their business, but is also likely to be interested. If in doubt, stay away from startup events!
Another key mistake founders make is failing to sell themselves. The authors note that it’s just as important, if not more so, to sell yourself as well as the idea.
“Keep ‘courting’ till you find the right match,” they write. “Not every investor will be right for you, and your startup won’t be right for everyone, so just move on quickly and never let the business out of sight. As Napoleon Hill said: ‘The best way to sell yourself to others is first to sell the others to yourself.'”
As far as startup conferences go, founders also need to be extra careful. The authors note that “raising money at conferences can be costly and counterproductive,” and further advise that much of the business that does get done, gets done during the “dark hours” at the coveted after-conference parties where everyone gets wasted and all of a sudden your idea sounds that much better. 🙂
The overarching message from Livesey and Isac is that startups ought to spend more time with their customers (or find them first, if there are none) to establish exactly what it is they need and then drive sales accordingly. The authors argue that it’s “more important to focus on your customers than your investors,” and they urge founders to first of all establish the problem they’re trying to solve, followed by their value proposition.
“Get your early adopters. Speak to your customers and listen to what they are saying. Don’t tell them you are a startup — consumers don’t understand that, focus on your product, achievements and media coverage. Then keep working relentlessly on the product, and finding the right product market/fit. Repeat.”