Getting fat isn’t good for your health. It makes you inactive, lazy, you’re easily out of breath and you can’t do a lot of things that others can (not bashing anyone here, just telling a story).
Now here’s something you probably never really thought about. An area where you can easily get fat but you’re probably barely aware of: Your startup.
A while ago I was talking to a friend of mine. He put the problem I was trying to describe in a few earlier posts quite nicely. He said the biggest problem of many startups is that they get fat.
Now what the hell does it mean a startup gets fat? Here’s what it means:
Many startups apply for some kind of government grant, try to raise capital or start crowdinvesting campaigns without having any proof of concept (successful sales) yet. In many cases some of these startups receive grants or money because there is a lot of dumb capital out there.
And that’s when you're at risk of getting fat.
Your startup gets fat, lazy, inactive and sloppy. You know you have money on the bank and you’re generally not pushed to validate your idea and generate revenues as fast as possible. You're not struggling enough.
Why? Because you don’t need to make money to pay for rent, groceries and all of the essentials. The necessity to make money and generate revenues is gone. So you won’t be forced to think about creative ways of validating your idea through sales.
Instead, you’ll just continue building your products for months and months and never really try to make money with it. You’re still stuck with the same old assumptions and the same old product (bee there done that quite a few times myself).
You’re afraid of validating your idea and selling it to your prospects.
You’re afraid of your prospects because they might not be willing to pay for your product. You might turn out to be a fraud. The money people invested in your idea is lost. What the hell are we going to do now?
And that’s when most of us decide to build the perfect product. We add a little feature here, one more button there and we never really stop developing our product. We are trying to build the perfect product no one will ever be able to reject.
We fall in love with our product and then we start tunneling.
But why do we do all of this? Because we can!
The grants we received allow us to live quite a decent life. We don’t struggle hard enough. We are not in a hurry. We might have changed our lifestyle a bit but we are not struggling with rent or anything. (see also I don't work for Money. Money works for me).
Imagine you're going to New York or Silicon Valley to build your company. If you're not able to validate your idea within a few months you're out. It's just too expensive over there. You can't afford to pay rent for too long without generating any revenues.
But most importantly it's almost impossible to get funding without a proof-of-concept out there unless you already have a bulletproof track record and a few exits under your belt.
At the end of our funding period when all our funds/grants are gone we are at the exact same point we were a few months or even years earlier. We still don’t understand the customer or what they are willing to pay money for/really need.
We have built a product that was never validated on the market. A classic case of “technology push”.
And that’s when we start to realize that the money we received wasn’t a validation of our idea (as we might have thought in the beginning).
Instead it was money that bought us time to build the perfect product. A product no one really needs. A product without a market.
We start to realize that it made our startup fat…