Many startup founders complain that investors won’t invest until they show a lot more traction. Proof that the product works, that customers love it, and that the CEO can grow it.
They aren’t the only ones waiting for you to show more proof.
1) Do you want a great “full-stack” software developer to create your first product or add serious heft to your dev team?
Experienced (and expensive) coders are often more skeptical than investors. You can’t pay them much, so they have to place a bet on your equity being worth something significant someday.
2) Do you need to bring on a full-time dev leader to build your product or a sales leader to get revenues going?
They each know many founders and have heard many startup pitches. They know startup ideas and startup founders usually don’t make it very far.
They are betting their current income vs. future equity AND they are betting their reputations. These early-stage leaders choose their bets very wisely.
3) Hiring a full-time or part-time employee and you can’t pay much?
This is the startup game. You need capable adventurers that will join your team before anything is obvious, including you the founder. They may be adventurous, but they are still placing their bets on whether you’ll be around in a year.
4) Want to work with a top-notch service provider?
The best service providers and contractors are in very high demand, so they don’t work with everyone who can pay them. They are very choosy about the companies and people they work with. Been there done that.
5) What about those bigger partners who bring access to a market and credibility to your reputation?
Same thing. They are extremely choosy about the companies they work with and publicly endorse. Their reputation is at stake and they are making a big investment they expect to pay off.
Are all these leaders, employees, partners, and service providers “wrong” just like those picky investors?
Nope. They have probably done the startup game a lot longer than you and they see the bad odds too.
I’m talking to these folks every day. They have been burned before and now they are choosy.
They see this happening year after year:
- Most product ideas never make it to MVP product
- Most MVP products never to 10 paying customers
- Most startups with a few customers never get to $50K MRR
- Most software startups never get to $1M ARR
- Most founders who say they will get funding don’t get funded
Most. But there’s a chance.
OK. So what can founders do?
A simple answer is to be all three of these things at once:
- Be serious and credible yourself. Know the actual game you are playing.
- Be clear and realistic about your vision. Here’s exactly what we are doing and there’s a good chance it will work and here’s what you can win. Or not.
- Don’t try to hire employees and service providers who only work with bigger companies. Just recruit “startup freaks” like you.