In 2019 it’s pretty cool to be a “Startup Founder” or an “Entrepreneur” or to have an idea for an “App”. And a lot of media coverage of actual, successful entrepreneurs made it look easy to become extremely wealthy to an entire generation.
And they could not be more wrong.
In a previous blog post I made a statement along the lines of: most people who go around posing as “Entrepreneurs” are fakers. They have no clue. They don’t know what they are doing. They have nothing to sell. And even if they did: they wouldn’t know the first thing about actually selling it and generating revenue. Which is to say: most literally don’t have any clue about the very first thing in business. I don’t want to pessimistic, but I must be realistic.
Nothing happens in business until a sale is made. Investors care about revenue (and profits). But without any revenue there is no profit. No repayment to investors. And without a “path to profitability” – a common phrase used among modern angel and VC investors: you need to figure out how you’re going to sell.
Just hanging a shingle (Web site) without a pretty thorough marketing strategy isn’t going to blow investors’ skirts up.
Back in the day (90’s & early 2000’s), merely growing a user-base and a “brand” was enough. Investor (and the entrepreneurs who created them) didn’t quite know how to monetize millions of people. Eventually: advertising was how it was done. That was the obvious play.
These days: users alone aren’t complete shit, but…just having users without any other value you’re offering them is pretty worthless. You need to be able to sell them something.
Inexperienced (AKA: Dumb) entrepreneurs celebrate taking on massive debt and selling off a piece of their fast-growing business. Investors wouldn’t invest if it wasn’t or didn’t have the potential (unless you’re related, of course). This is absolutely, 100% backwards thinking, and yet: extremely pervasive.
Sure, you often do need money to make money in business – especially in the startup world. You need to build your product. Your infrastructure. Your offering. Your systems. But when they go live: they need to work. No “spray and pray” allowed at this level folks.
You need to generate revenue ASAP. Even a little – that’s evidence of the market. Once you have a little, you can grow. It’s not easy work – that’s why salespeople make the big bucks.
When you’re talking to investors you need to think in terms of cash…like they do. They understand that there’s a period of building and growth before they make their zillion-dollar returns. But you need to have a legitimate, step-by-step plan to reach regular revenue milestones.
And if you’re not an expert at selling and creating marketing plans, writing sales pitches, objection handling scripts, sales collateral, finding leads and inputting into a CRM, creating campaigns and messages and funnels and a professional to execute it all for you and the systems to deliver and grow: maybe you want to find someone who can do a few of those things for you. Or write your Marketing Plan – Revolutionary Industries writes Startup Marketing Plans (happy to chat about it for Free).
You’ve heard it before: the #1 Job of a Startup Founder is Sales. It’s true. Because regardless of the debts you incur and the equity you sell: at the end of the day you need to build a profitable business. That’s your mission.