I think the startup idea-to-business journey is mostly about this:
Surviving long enough to keep experimenting, iterating, and trying things until you find a combination that can grow into a serious business.
Startups are experiments to find a scalable business.
Most experiments don’t “work.”
And most startups don’t grow into real businesses.
Most startups run out of time and tries before they find something that works.
All of this experimenting takes much longer than founders think to finally get something going that looks like a business that could grow.
In this “We think there’s a business here but we’re still figuring it out” startup stage, it gets pretty crazy, confusing, and disheartening after you get underway.
Despite what most first-time founders imagine, I don’t think having serious outside funding helps at this stage.
“If only we had $1M or $2M seed funding to figure this out!”, a couple of founders told me yesterday.
I told them two things:
- Experienced angel and seed investors know you are experimenting and thrashing about, albeit optimistically. It’s 10x riskier for them than when you get to some customers and revenue that look like a positive trend
“Come back when you have $50K monthly recurring revenue and we can talk,” they will tell you. This is very sensible for them.
You will waste a lot of time raising money from experienced investors if you don’t have serious traction yet. - It’s actually easier to be extremely frugal and creative in your startup, with self-funding of some sort than to chase experienced funding right now.
And having serious funding with a gun to your head to hit growth goals doesn’t really help when you are still in the experiment-and-thrash stage.
That’s just from my own experience and from what I have seen in the long run with hundreds and hundreds of software founders that I know.
It’s actually better to not quit your day job, keep funding from your service business, or get a little funding from a friendly angel than to go on a year-long quest to raise money that doesn’t want to fund you at this stage anyway.
The superpower of self-funded and bootstrapped and crazy frugal startups is that they can survive for years while they run enough experiments to find something that can scale.
Funded startups with clock-ticking cash burn run out of time when the money runs out before their traction kicks in.
This is most of the startup game:
SURVIVE LONG ENOUGH to keep experimenting and trying things until you find a combination that can grow into a serious business with happy customers and real revenues.
Survival = the ability to persist and keep trying.
#practicalfounders
