Your Experiment is Not Your Strategy.

I’ve been running into a lot of founders who need to hear this recently.

When founding a company, there are only so many shots you can take on goal. Time is of the essence, and at some point you will run out of money. However, the goal is to make a profit, or prove you have product market fit.

There’s this breed of founder/startup where they have built a great bit of technology and the team has sold a few pilot customers, who are paying the startup peanuts to use it.

Meanwhile the startup is running out of money, but they are happy that some great brands are there to use the product.

This means one of two things:

• This customer is the right customer and should be paying much more so that your business can work.

• This customer is the wrong customer, and you need to figure out who your customers is.

When building a startup, it’s important to have a clear, long term mission, and then have a practical product that pays for everything. Vinod Khosla calls this “Everest” and the practical profitable product, “Base Camp”.

I’m running into a ton of startups who believe they are at Base Camp, but in reality they are still climbing up the hill. This is a real problem, this means that they will plan to rely on venture capital funding over the coming years to get to the “Base Camp.”

My advice if you are in this situation is “Your experiment is not your strategy.” You are a startup, being agile and testing things is a part of the benefit of being early. So try thing! You don’t need to do it forever if you do it once, but you might learn something. Optimize for learning to build towards your base camp.

Make something a customer wants… and pays for.