By Tim Eisenhauer
In the startup world, the leaders of newly minted companies often focus on raising cash. They have an idea for a product and are eager to get the funding to bring their concept to perfection before launching it. They develop detailed business plans and make their pitch to potential investors. Sometimes that strategy works out, but most of the time, it doesn’t.
Luckily, that approach isn’t the only way to build a successful company. Sometimes it makes more sense to raise customers and build a team before raising money and building investor relationships. So how does it work? Here are the three keys to running a successful business without the constant pressure to seek funding:
- Get your product to market as soon as possible. Many companies hold back on launching their product because they’re trying to get it absolutely perfect prior to rollout. That’s a mistake for several reasons. First of all, delaying the launch pushes back efforts to build a customer base, and a startup needs to grow a customer base as quickly as possible. Pushing back the launch also gives your competitors an opportunity to roll out their product first, which can crowd you out of the marketplace. And finally, delaying the launch deprives your company of an opportunity to learn from customers so you can continuously refine the product.
- Take care of your team. When the company is in the startup phase, it’s important to focus on your people and create the right company culture. Take care of employees so they’ll take care of your customers. Sometimes startup teams work for very little pay or even make contributions for free, so at this point, you’re in the business of selling hope. Be transparent with employees to build trust. Be a human being – and treat them like fellow human beings. Get to know and care about their needs, including emotional needs. And when all the hard work you’ve invested pays off, remember that leaders eat last – reward employees first.
- Drop everything else and focus on your customers. Once you’ve signed up some customers, it’s time to shut up and listen to what they say. When they have an idea, take it seriously. When they have an issue, drop everything else and take care of it immediately – even if it’s 3 AM. Handle customer service like your business depends on it, because it does. By nurturing customers and building relationships, you’ll get the referrals that will be the lifeblood of your company going forward. You’ll also get incredibly valuable product feature ideas, and when considering them, keep in mind that your goal is not to make customers work the way you think they should but to build a product that supports their workflow. Inviting customers to participate in beta testing is a great way to get new ideas.
If you’re just starting out with a terrific product idea, it’s possible you’ll be able to create a business plan, pitch it successfully to investors and get all the funding you need to develop and launch your product successfully. But the odds are you’ll have to bootstrap your company for a while, so it pays to be prepared for that contingency.
To take on the challenge of bootstrapping a startup successfully, it’s important to remember that it’s all about the customers. Getting a product in their hands should be Job #1 – it doesn’t have to be perfect, but it does have to make customers’ lives better. Then make sure you take care of your team so they’ll take care of your customers, and ensure that you and all of your staff are prepared to go the extra mile for customers. If you raise customers before raising money, you’ll increase your chances of making it without initial funding.
Tim Eisenhauer is a co-founder and president of Axero Solutions. He writes on the subjects of social intranets, employee engagement, business communication, knowledge management, and collaboration. His articles and opinions have been featured in Fast Company, Inc. Magazine, CNBC, 60 Second Marketer, HR.com, and others. Follow him at @timeisenhauer.