Most entrepreneurs fall on 1 of 2 sides of the fence.
They either fall on the:
1) product/engineering side
2) sales/marketing side
This post is mainly for those that come from the product/engineering side like me…
When you start a new venture based on your experience with product, it’s easy and natural to then become obsessed with product…
However, once you reach a certain threshold of product/market fit then this obsession must be tamed and you must transition to a new obsession: sales/marketing.
One of my favorite entrepreneur bloggers David Cummings shared a great post on this topic yesterday. He states:
Overall, the biggest takeaway is that there has to be a serious shift on the entrepreneur’s part going from product / market fit focused to customer acquisition focused. Lack of customers, and the resulting revenue, is the number one reason startups fail (no revenue = no business). Assuming there’s a good market out there, building a customer acquisition machine after finding product / market fit is the difference between success and failure.
There’s always an ongoing debate in the entrepreneurial community about what makes a newly founded business a startup (growth business) vs a lifestyle (small business).
Today I came across yet another perspective on the growth vs lifestyle debate. This one comes from Atlanta serial entrepreneur and angel investor David Cummings from back in 2010. Cummings states:
Growth businesses have a repeatable sales process that doesn’t involve the owner/founder.
In short, the conclusion Cummings is making is that if you are required to be there everyday to generate revenue for you business, then you are not working on a growth startup, you are creating a small lifestyle business.
Either one is ok, just make sure you are clear with yourself on the time commitment and financial outcome your choice may or may not limit you to.
Read the full blog post from David Cummings here.
Earlier this week, Ash Fontana published a post on TechCrunch that is going viral through the entrepreneur community. The post covered how much traction a startup needs to have in order to raise money from VCs. I think the reason it is being shared and re-shared over and over again is because it simply demystifies something that every entrepreneur wants to know.
Bottom line, for the startup I’m working on I would need to grow to 50k a month in revenue. David Cummings followed this coverage of Ash’s TechCrunch article with this informative post suggesting that the milestones Ash suggest would need to be hit within about two years after launching to have a chance to level up with VC money.
According to Ash, the VC milestones are as follows:
If you’re a social company, you’d do well to have at least 100,000 downloads and/or signups before going after your million-dollar round. If you’re running a marketplace or e-commerce company, you should be aiming for around $50K in revenue each month. If you’re going after the enterprise, you’ll want at least 1,000 paid seats at $10 per seat per month (or the equivalent for your pricing model); if you’re focused on big enterprise, you should lock down at least two huge (pilot) contracts.
I was browsing through a few of the old post on one of my favorite entrepreneurship blogs written by David Cummings. I came across a post he wrote titled Look for Startup Ideas that Aren’t Unique. Most of his blog post are short and to the point, and this one is no different. His main suggestion is:
Ideas are important, but they shouldn’t be unique. Find an idea that has great founder fit and out execute the competitors.
Following this recommendation will save you a whole lot of sleepless nights worrying about either coming up with a unique idea or someone stealing your idea.