Page 192 - 6 Secrets to Startup Success

Staying Power 171

1. Launch close to the customer.

2. Address your biggest risks early.

3. Raise more money than you think you will need.

4. Commit resources wisely.

LAUNCH CLOSE TO THE CUSTOMER

In every successful startup journey, there is a point of no return,
where the aspiring founder moves from the idea stage to whole-
hearted commitment to the cause. This passage is always marked by
a stepped-up investment of time and resources, and, in some cases,
includes resigning from a job to plunge full-time into a new venture
role. You are no longer contemplating whether to move forward. You
are on the clock, with money falling through the hourglass.

Even after burning significant time and cash, however, many start-
ups haven’t really started. They have yet to interact with paying cus-
tomers. They understand very little about market demand. They may
not have a ready-to-sell product or a workable channel for sales and
distribution. Instead, they are engaged in pre-launch activities, such
as conceiving the future business, developing products, building exe-
cution plans, recruiting partners, or putting supporting technology in
place. These activities are typically necessary, and some types of ven-
tures (life sciences ventures and speculative real estate development,
for example) require long, heavily funded pre-launch periods. But
pre-launch activities that are not directly aimed at acquiring clients
are often several steps removed from the marketplace, the arena in
which your venture’s viability will ultimately be tested.

Therefore, one of the keys to strengthening your runway is to
move your effective starting point, the point at which you plunge in
full-time and begin to burn significant resources, as close as possible
to your point of revenue creation. This usually means incubating and
gestating your idea as inexpensively as you can, while making a living
through other means. How much of your idea can you develop and
test in advance without a huge commitment of capital? How fully can
you develop a working product before you make the full-time plunge?

American Management Association • www.amanet.org