Your Next Round's Not Coming.
If you are a startup, look at your bank account right now. The beauty of a startup is that every one of them believes they are the exception not the rule. In hard times this seems to be a disease more than a super power, and I’ve been hearing a type of jargon that is laying hope in the wrong things recently.
There is a type of founder that loves to play the VC game. They believe if they hit “X” metric, suddenly all of the capital for Series A unlocks or Series B and so on and so on. In my experience that isn’t how it works. It also makes founders lose sight of what actually matters which is the customer.
So again, look at your bank account. Right now you have 6 months of runway and you have told yourself that the Series A is coming. It’s not. It might turn into a seed extension, but it probably won’t.
There are a lot of expletives that just jumped into you head about me right now, but I’m not going to write them down because my daughter just signed up for my newsletter, and I want her to read nice words.
This is your opportunity. You have 6 months. Venture Capitalists are not your customer.
If I were in this position (and have been in the past) -
Have an honest conversation with your team about what’s working and what is not. Cut the things that aren’t working.
Talk to 100 customers this week about your product and understand why they want to work with you rather than anything else.
Try to really understand what problem you are solving.
Reduce burn, increase prices
FOCUS on the one thing that is valuable from your product! FOCUS only on that!!!
Starting a company is hard, but in this market, although everyone unanimously understands that fundraises are slow, and understands that layoffs have happened across all companies - there’s a subset of great founders who believe the rules don’t apply to them.
These founders believe that the game is baseball, when it’s actually golf. It’s you against you, and this is a market of survival. Focus on the customer. Focus on the customer. Focus on the customer. Charge for your service.
The market is going to stay dry for a long time.
CUT COSTS, BUILD VALUE, MAKE MORE MONEY!!! You have 6 months.
RIP Good Times.
Very good article. The VC game is super hard now - especially in Europe where it is dead. Since we started focusing on customers things are super clear and we don't have runway problems anymore. Cockroach mode works these days. Sell sell sell. There is no better money in than revenue.