The NHL returned to the ice recently. An entire season of professional hockey in North America was almost wiped out entirely in order to develop a collective bargaining agreement(CBA) all parties were equally unhappy with. The CBA has almost nothing to do with the sport of hockey. It has everything to do with the business of the National Hockey League.
Early stage startups must learn to ignore the funders. What you need to understand but few funders will ever explain to you (except the good ones like Mark) is that they’re playing a very different game than you. Venture capital math is rarely aligned with startup math. Certainly it may be aligned for your project but you’d be in the minority.
Some funders are also terrible at saying no, they love maybe, they love offering their opinion. I said “some”, not all. Their maybe will likely come loaded with advice, however, that advice often points you towards a “pivot” ultimately more highly aligned with the game they’re playing. The good ones will explain to you that few businesses should be venture backed but that doesn’t mean you don’t have a great business.
Funding is an integral part of every business but it’s only a part. What I’m referring to here are young projects who look to the funding community for validation. Is my new business worthy? Should I keep going? Do you love me?
“Telling people what you think of their ideas is a terrible thing to do”
“It’s not helpful. In fact, unless you’re their target market and they’re pitching you on their product, you’re probably only hurting people when you give them your opinion.”, Single Founder
Building your new business to satisfy funders is like trying to win the Stanley Cup by reading the CBA over and over again. That’s not the game you’re playing! Yes you need to meet and work with great funders. Yes, a great funder can make or break certain businesses. You need to understand funding inside and out and leverage it well, as with the CBA, but focus on the real game.
The best funders will be clear with you about all of this. They’ll encourage you, explain that you may never be a venture backed company but that doesn’t mean you aren’t a company. They’ll push you to keep building, get to revenue, work for your customer. They’ll explain that being venture backed is one of an infinite set of paths to building a great company.
For more stories of bootstrapped companies, check out 37 Signals case studies.