You have the mix right but there are still hard yards left to get the cake right. Like all good bakers know, the cake can still be dry, burnt or even collapse if the oven temperature or timing is off. Some of these are listed below. The order may vary across ventures but this is typical.
a. Getting your product or service market ready
Getting from an idea on paper to a demonstrable market pilot is the least one needs to do to convince customers and investors that you are a horse worth backing. Depending on the euphoria or lack of it in the market for your product or service, you may have go further towards a full fledged market version with actual customers before you are taken seriously. If you picked the right area, a novel way to solve it with an A grade team, you might even get funded without a piece of code written but don’t bank on it. You need to have enough capabilities within your core team and enough staying power financially and otherwise to see the product or service to market and paying customers. It’s best to be prepared for this.
b. Finding your first few marquee customers
As investors often know before or soon find out, having a great tech founding team
and a good idea well executed doesn’t guarantee that customers will come flocking
to your door. It’s possible they don’t know you exist; prefer competitors or they don’t trust you enough to buy, especially if it’s a mission critical or expensive product or service. If you did some test marketing prior to building the product or service and found willing customers with a commitment to buy or even pilot test it for free with some pre-conditions, you have a head start. For B2B products, it’s certainly advisable to do the pre-testing before investment, as it helps customer commitment as well as fine tuning the offering itself. Even for B2C products or services, this can be and should be done, if feasible.
c. Getting the right investors on board
Having strategic investors with contacts in the target market is a plus over folks just with money, as they can put you in front of decision makers. They can help you augment the team with the right business skills, full time or advisory, to help make the transition from a great product or service to one which sells. Getting partners with the right complementary offerings in the market is another benefit of having the right investors. A good investor is as much a partner in your success as one of your core team. It’s a rare successful venture which does not morph its original offering completely in the first 3 years of its existence! Investors can and should help with direction, as unlike you and your fellow founders; they are close enough but not too close to see. It’s like the old bacon and eggs story – the hen is involved but the pig is committed. Some distance with money (read, skin) in the game helps give the right perspective.
You have now moved in to the growth phase of your venture if you have come this far. You now have a core team, salable offering, paying customers and money to get to the next stage. Before you book that seaside home in Monaco however, there’s more to be done as we will delve into in the next blog.