ReasonsCustomers

MatterWhen You’re

Raising

CapitalFeatured in The Metropreneur, September 2014

By Tom Walker

-Yogi Berra

it’ll go.

You don’t have

to swing hard to hit a home run.

If you got the timing,

A lot of things—

sometimes including

the sun and the moon—

have to line up just right

for a startup to attract

investment capital.

The product has to work.

The founding team has to be high-quality, flexible, tenacious, and coachable.

The company has to solve a big problemfor a large market as evidenced by early adopters with some revenue.

Investors have to see and believe that the company can make money when operations and sales scale up.

When you have the timing, as Yogi says,

you don’t have to swing too hard.

But if your timing needs a little work,

there’s no better way to improve your startup’s odds of accomplishing critical

milestones than by engaging with

customers.

Customers will tell you if your

concept makes sense and if

your product works or not.

It’s never too early to engage a

potential customer—even if your

prototype is made out of cardboard

and glue. Start by describing the

business problem you think your

technology can solve; don’t start by

talking about the technology. Then

listen, listen, and listen some more.

Customers stress test

any organization

Customers have timetables, deadlines, and expectations.

With a customer to answer to, you’ll discover whether or not you’re good at building relationships. Having customers is the only way to learn how to develop the trust and confidence that allow young companies and their customers to weather growing pains.

You don’t know as much as

you think about the problems

customers are trying to solve

Looking at a problem or challenge

from the customer’s perspective

rather than through the lens of the

solution you are trying to build will

put a different spin on things.

Hopefully, wearing the customers’

glasses will stop you from building a

product no one wants to buy.

Early customers can serve as referrals for the future customers you hope to gain.

There’s a certain loyalty that often

takes hold between startups and

their early adopters; building

something together can create a

lasting esprit. Have you ever been

someone’s first customer?

Customers pay the bills.

There is nothing like revenue from

early adopters to put a sparkle in

potential investors’ eyes. Or if your

solution isn’t revenue ready, perhaps

your technology is so promising that a

potential customer would help fund

development, supply materials, or

give you some engineering or

machine time. There’s no stronger

indicator that your company’s value

proposition makes financial and

economic sense than when a

customer puts some skin in the game.

We hear over and over from our client

companies that many of the most

rewarding relationships they have are with

their early customers.

And we hear from investors that startups

with client relationships have an advantage

over those that don’t.

As Yogi says,

“If you have

the timing,

it’ll go.”