This goes out to all the entrepreneurs who have yet to think about their businesses in depth and reason from first principles.
Before you begin raising money, make sure you have a clear idea of how your product will make money. You should be able to articulate this vision to investors.
Even better, test your hypothesis, and have solid results you can share with potential investors.
Wrote this on my run yesterday:
When I came to Silicon Valley, I had no idea what to expect.
I wasn’t sure if I would find a job or if I’d have to reshuffle the deck.
Silicon Valley is the mecca of technology. It’s where entrepreneurs build products based on sociology and psychology.
Everyone wants to live in San Francisco and learn how to code. And when it’s time to raise money, they make the drive down to San Hill Road.
C’mon, let’s build a startup! Wait, hey man, think about it for a second, do you even have an idea for a real product?
Businesses are supposed to make a profit, that’s why investors invest. But wait, Twitter didn’t focus on the money early on, so why should we over obsess?
I absolutely love the fact that there are so many startups. So many people trying to make a dent in the universe. That’s great.
But it’s important to realize that startups are businesses, and businesses should make money. And make lots of money if you want to raise venture capital.
For a startup to make money, it is super super super super important for the founders to have a clear path to monetization, and then be able to explain this vision, as well as act on it.
The best technology will not always win. The best product will not always win. The best team will also sometimes not always win. It takes a blend of everything. You need to have great technology, with an amazing product built by a great team who understands how to put that product in the hands of customers, and gain significant market share.
That is why I also wrote about how Startups are F$#%^& Tricky.