Startups Need Customers
One of the biggest challenges Startups face is acquiring and retaining customers. So many startups are focused on creating an awesome product, and why shouldn’t they be? It’s all about the innovation.
The problem remains, where can they find the time to reach their customers?
The biggest challenges for startups are time, capital, and human talent… among other resources. Most startups can’t afford a sales force, and perhaps the inherent flaw with startups trying to raise money is they have even less time to focus on cultivating their product or service. Just as important, they need to somehow develop customer and/or distributor relationships.
John Mullins joined the Babson Entrepreneurship Club last night 10/3/13 to discuss strategies for startups on how they can grow their business without raising money through investors. The one key takeaway regardless of the business model (subscription, matching, or Paypal), is for startups to generate revenue in advance so they can take advantage of having negative working capital. This means getting money from the customer in advance, and paying the supplier later. This allows the startup float, and ability to have cash.
Mullins suggested that crowdfunding is similar to raising money through angels or VC’s, in that it is ultimately not time well-spent. We had a good discussion after his presentation regarding this point, and not surprisingly he was very astute, and was willing to listen to my ideas. I explained the mission of Startup Rounds, and how it will put amazing startup profiles in front of several potential customers, and investors. Sure, it may require some time initially to develop a good profile, but certainly not comparable to the amount of time it would take to raise venture capital.
A successful crowdfunding campaign is arguably the best way to get funded for many young businesses. Crowdfunding is a great way to generate early sales, and negative working capital, and therefore a great investment in-terms of where startups should choose to allocate their time. Startups can easily iterate and improve their ideas to meet customer and investor recommendations. Startup Rounds allows early stage businesses to get in front of investors and customers, allowing them to make a minimum investment to create a profile, and easily scale the amount of cash they are able to generate and put back into the business. By making it easy to raise money and find customers, startups can get over the hurdles.
Startup Rounds is partnering with the Babson Entrepreneurship Club and other sponsors to bring Babson (undergrad, grad, and alumni) startups an opportunity to win prize money and appropriated resources. Currently the website portion of the contest is based on support, while we aim to build our algorithm to consider other weighted data, including but not limited to; money raised, on site mentor feedback, and startup response ratings. Startups must make the cut at the end of each round in order to advance. The top ten teams will be rewarded with substantial recognition and the opportunity to pitch in front of an expert judge panel. The top 5 teams will be rewarded with Cash and resources in kind.
Check out the details at www.startuprounds.com.