Most
startups are very focused on raising money from investors. This is one of the
reasons they take part in hackathons and startup competitions , where they
pitch to juries so they can get some positive publicity and utilize this in
order to catch the eye of funders. They hope to find investors who will sign a
cheque which will allow them to bring their product to market , and then find
customers who will pay for it.
However,
raising funds can be a long and complicated process . This consumes a lot of
energy and wastes a lot of the founder's time , because it distracts the
founder from his primary purpose - that of delighting his customer.
In
reality, the best source of funding is actually your customer ! If you can
create a product or a service for which a customer will pay, then this will
allow you to bootstrap yourself , so that not only do you retain ownership of
your company, you can also create a wildly successful one. You could offer
customers a discount for advance payments; or offer freebies for those who are
willing to act as reference customers. If you are really ambitious, you can
offer key customer equity in your company, if they refer new customers to you.
The
best result of this strategy is that when a prospective investor can see
customers are willing to pay for your product, they'll line up to fund you!
Source: Dr. Malpani
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