10 lies you’ve been told about building a startup
(from a guy who spent 14+ years working with start-ups):
(from a guy who spent 14+ years working with start-ups):
1. You must get VC funding
There are many alternatives to funding.
It's also possible to do it without external money (especially at the beginning).
Companies like GitHub, MailChimp and Lynda have proven that you don't need external capital to build something incredible.
There are many alternatives to funding.
It's also possible to do it without external money (especially at the beginning).
Companies like GitHub, MailChimp and Lynda have proven that you don't need external capital to build something incredible.
2. Your MVP must be perfect
Your MVP needs to do 2 things:
- Validate that the problem is real
- Confirm people are willing to pay for it
If you're waiting for perfect you've waited too long.
Your MVP needs to do 2 things:
- Validate that the problem is real
- Confirm people are willing to pay for it
If you're waiting for perfect you've waited too long.
3. You don't need profits if you're growing
Growth is great.
But at some point you're going to need to demonstrate profitability.
This expectation that you'll generate an exit at the "next round" is just not sustainable.
Growth is great.
But at some point you're going to need to demonstrate profitability.
This expectation that you'll generate an exit at the "next round" is just not sustainable.
4. You can raise off a story/idea
If you're a first time founder, your chances of raising with just an idea are slim.
The recent turbulence in the market has made investors significantly more cautious.
Focus on building an MVP to validate that your idea is worth investing in.
If you're a first time founder, your chances of raising with just an idea are slim.
The recent turbulence in the market has made investors significantly more cautious.
Focus on building an MVP to validate that your idea is worth investing in.
5. You need a $50b market
A big market is only beneficial if you can penetrate it and take market share.
Focus on understanding the nuances of the market and how you're going to stand out from the competition.
50% share of $1B market > 5% of $10B market.
A big market is only beneficial if you can penetrate it and take market share.
Focus on understanding the nuances of the market and how you're going to stand out from the competition.
50% share of $1B market > 5% of $10B market.
6. Founders are less important than the idea
An idea without execution is worth nothing.
Founders (and their team) are essential to making those ideas a reality.
No one credible backs a business without a capable founder.
An idea without execution is worth nothing.
Founders (and their team) are essential to making those ideas a reality.
No one credible backs a business without a capable founder.
7. You can raise capital quickly
The 1-2 month raise is long gone.
The pressure of deploying capital has eased so investors are quite happy to take their time.
Give yourself more time and focus on building relationships and validating your product.
The 1-2 month raise is long gone.
The pressure of deploying capital has eased so investors are quite happy to take their time.
Give yourself more time and focus on building relationships and validating your product.
8. You don't need a board
The fall of FTX has shown a glaring spotlight on governance (or the lack thereof).
While no one is expecting you to have a 10 person board at the start,
But there is no excuse for NOT having strong checks and balances.
The fall of FTX has shown a glaring spotlight on governance (or the lack thereof).
While no one is expecting you to have a 10 person board at the start,
But there is no excuse for NOT having strong checks and balances.
9. Large competitors are slow
Your biggest competitors are where they are because they win.
Being big doesn't stop them from diverting significant resources to fight you if the ROI is right.
Your barriers are temporary. Be prepared for increased competition as you succeed.
Your biggest competitors are where they are because they win.
Being big doesn't stop them from diverting significant resources to fight you if the ROI is right.
Your barriers are temporary. Be prepared for increased competition as you succeed.
10. You need a 5-year business plan
Running a startup is all about adaptation to market feedback.
Unlike established businesses, there isn't a long track record to base your forecasts.
A well-thought-out 12-month business plan is worth more than a 5-year work of pure fiction.
Running a startup is all about adaptation to market feedback.
Unlike established businesses, there isn't a long track record to base your forecasts.
A well-thought-out 12-month business plan is worth more than a 5-year work of pure fiction.
TL;DR (1/2)
10 lies you’ve been told about building a startup:
•You need a $50b market
•You don't need a board
•You must get VC funding
•Your MVP must be perfect
•Large competitors are slow
10 lies you’ve been told about building a startup:
•You need a $50b market
•You don't need a board
•You must get VC funding
•Your MVP must be perfect
•Large competitors are slow
TL;DR (2/2)
10 lies you’ve been told about building a startup:
•You can raise capital quickly
•You can raise off a story/idea
•You need a 5-year business plan
•You don't need profits if you're growing
•Founders are less important than the idea
10 lies you’ve been told about building a startup:
•You can raise capital quickly
•You can raise off a story/idea
•You need a 5-year business plan
•You don't need profits if you're growing
•Founders are less important than the idea
Are you looking to raise capital in the next 12 months?
I’ve invested over $500M and seen 1000s of pitches.
I work with founders to optimize their pitches so that investors can't help but take their calls.
Want my help? DM me “raise” and let’s talk.
tinyurl.com
I’ve invested over $500M and seen 1000s of pitches.
I work with founders to optimize their pitches so that investors can't help but take their calls.
Want my help? DM me “raise” and let’s talk.
tinyurl.com
I send a free email once a week on business growth and fund raising strategies.
Every Saturday morning get 1 business growth tip to grow your business.
getrevue.co
Every Saturday morning get 1 business growth tip to grow your business.
getrevue.co
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