How often do I hear early stage investors (including myself) say: ‘But this product is so awesome, we just need a couple more tweaks here and there and then this will become big!’
Truth though is that most of the time the team did not find product market fit… or did not find a great edge to sell their product. Either way, the startup did not figure out yet how to scale the company. Good entrepreneurs are obsessed with their creation and it can be hard to take a step back and acknowledge this.
As long as we do not have a great product yet that is gaining traction, put your heads down, iterate fast on your product and business model, communicate your progress clearly to your investors, get their feed-back, and, most importantly, manage your cash carefully. Many amazing companies out there did not scale from day 1 on... As the saying goes, the cemetery is full of cool products...
Building a cool product is hard but building a great company is even harder. The point I want to make in this post is that no entrepreneur should let poor cash management get in its way to do the latter. Of course we all like the charts that show an ‘up and to the right trend’ from day 1 on, but sometimes it just takes more time than anticipated to hit this inflection point.
A big vision and some initial results will help you keep your first investors excited and raise some additional seed money but, to raise a proper Series A, we need to be able to show tangible results. Shutting down a company because the initial thesis is wrong is okay (this is part of the startup game...) but founders should never have to kill a great product because they burned through cash too quickly trying to scale something that is not ready, yet...
Finally, if you feel that you have a great B2C or B2B product that is gaining early traction and are considering to raise your first institutional round, I would love to talk! We have lots of learnings to share from our portfolio, so please feel free to reach out.