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“Will the dogs eat the dog food?” This rather crude expression weighs heavily on the mind of all good startup founders, no matter how confident they appear. We all know the products they give away, and the ones purchased by family and friends don’t count. The real milestone, proving the business model, is that first product sold for full price to a total stranger, leaving him happy.
So what can you do to expedite this event, or even improve the odds that it will happen at all? Of course, one sale isn’t really enough, so you need to get the first customer to recommend you to a second, and make sure the rate of sales ramps up quickly enough to keep the business alive and growing.
This whole process is particularly worrisome to many startup founders, since their expertise and background more likely technology than sales. If you are one of those, here are some basics principles you should follow and live by until that milestone is behind you Read more
There’s nothing inherently wrong with your investors meeting each other, and it’s actually usually a pretty good thing. That said, it’s a bit unusual coming from the F&F side rather than the professional investor side. So I’d just be a bit cautious in trying to understand why your friend is pushing for this. Could it be that s/he just want to hang out with the “high profile” types? If that’s the case, it’s not really the right reason. Read more
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I’ve been advising and mentoring startups and growth companies for years, and find myself always pushing them to try something new, for the sake of growth and survival. When you try new things, you make mistakes, and I’ve seen many. Smart companies learn from their own mistakes, but some don’t pay enough attention to other people’s mistakes.
In the spirit of saving you a few lifetimes of pain, here are some common mistakes or shortcuts that seem to happen routinely: Read more
I would be unlikely to invest in a Brazilian startup at this time because I have absolutely no background or knowledge of the local market, I don’t speak Portuguese, I would be unlikely to be able to attend board meetings or even visit the company, and finally because there are issues relative to double-taxation under US and local tax codes that make many international investments challenging. Read more
To start with, a pre-revenue mobile company cannot expect to raise anything from “the VCs”. Venture capital funds invest in only one out of every 400 companies seeking funding, so the odds of your particular startup getting funded are astronomically against you.
Next, venture capital funds invest primarily in later stage companies that have already shown significant indications of success (known in the industry as “traction”.) Of the roughy $20 billion invested every year by US venture capital funds, only $300 million (1.5%) goes into startups. For a true startup to be able to raise venture funding, you would need to be perceived as a better bet than virtually every company graduating from yCombinator, TechStars, DreamIT, etc. Conceivable, but unlikely. Read more
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The first question most people seem to ask when contemplating a new startup is where they will get investor money. That’s certainly a valid question, but all the money in the world won’t make your business work if you don’t have a plan to use it, or hate what you are doing. I suggest that there are several important questions before assuming that funding is the gate to your success.
In reality, the best way to assure the success of your startup is to do something you love, as opposed to something that you think will make you a lot of money. Of course, all these things and many more are critical, so it’s important that you keep your priorities straight. Here are some key questions to ask yourself, before asking others for money: Read more