If there’s one big thing I have learned through my study of startups that did well over a long period of time and went on to become great businesses, it is that the secret of their success was simple –
- They made products that were so good that many people bought and recommended them to others, and
- They made more money than they spent on each customer
Such startups only get better as they get bigger.
Then there are countless others that start with the only idea of ‘selling’ to the investor, and don’t solve the real problem of the prospects they wish to convert to customers.
Such startups only get worse as they get bigger – losing more and more money per customer.
It’s a simple math that startup founders fail to understand, at least 90% who fail to see their second or third year.
And therein lies a big lesson for you, if you are just starting up.
Focus first on the customer (only then on the investor). Solve the problem that worries her the most. Be generous and offer her some things for free. But don’t lose money on what you sell to her, at least not on a sustainable basis.