Business greatness is paywalled.
For worse and for kinda better, we live in a completely different world for building and nurturing companies than even one generation ago did. Half a generation, even. I have a ten year old advertising degree, and none of my coursework included how to leverage TikTok because it did not exist.
And just as businesses are leaving behind the idea that happy, productive workers don’t necessarily need a physical presence in-office, so too are up and comers ditching the VC model of fundraising.
Customer first models are coming back for entrepreneurs who’ve decided not to play out ‘Shark Tank’ episodes, and just focus on building a good fanbase as their primary, or sole means of expansion.
Founder of Teachingstartup.com, Joe Procopio, told INC:
“I strongly believe raising money through customer sales is the best option, and in a lot of cases, it should be the only option.
I don’t want to have to ignore a great startup idea because a handful of West Coast venture capitalists won’t deem it investable. “
Procopio went on to detail the three ways he’s made this work:
Turning services into products:
“Evolve your approach until your service becomes quicker, more cost-efficient, and can be performed by someone other than just you. Oh, and those people will become your employees. Then, as you automate their tasks away, you’ll elevate them into knowledge and managerial positions.”
I love the optimism on that last bit, but to be fair, not every employer is out to pump and dump personnel…probably.
Spinning a new company from an old job:
“The majority of new entrepreneurs are spawned from the ranks of corporate behemoths, where they’ve been doing the same thing long enough to see all the flaws, so they find the areas most ripe for disruption and then attack those areas with new ideas.”
This one’s my favorite. It comes with the added bonus of getting to wipe a big load of ‘I told you this would work’ all over every superior who shot down your ideas at your old job. And who doesn’t want that?
Last and most difficult is Starting From Scratch:
“There’s no roadmap, there’s no market screaming for your product, there’s no advisor or mentor who can come in and tell you how to get started. You’re not only making the product, but you’re making the market, the sales channel, and most of the rules.
It sounds great on paper. It’s freaking scary in real life.”
This is where your great idea, or your passion springing forth apropos of nothing in your life save your research will leave you. It’s hard for a reason, but without people making it through like this, where would we be? It can still happen.
Cards on the table, I didn’t know what VC was until I took a position in the crowdfunding space. I figured all businesses were built from slowly building customer interest until bigwigs took notice (and ruined everything). But even though this might still be an alternative strategy to leveling up LLC-wise for now, it’s not impossible.
“Any of these three customer-first methods can result in companies that could take VC or other public money later on, once they’ve established their product, revenue, and sustainability. In these cases, the entrepreneur winds up negotiating from a position of strength–and, even better, he or she will know exactly how to put those funds to work to get the massive return that all investors expect.”, Procopio finishes.
Consider starting from a position that puts you a little less ‘hat in hand’ if you’re not already connected enough to go the friends and family route, or ready to get into rooms on a regular basis.
Nothing says ‘I can be trusted with money’ more than showing that you can make it. On paper at least. Happy ramening, and good luck!