There is a myth in entrepreneurship that is killing startup after startup. It is a disease that has spread like wildfire through the Triangle. Entrepreneurs, both young and old, fall victim to it daily. FUNDING. That’s right, the idea of funding has absolutely destroyed entrepreneurship for so many individuals.
Okay now that you are paying attention, here’s more detail. Funding is not a measure of success. Too many companies are being measured on how much they raised or what round they closed. Who cares?! The more important things are what was your revenue? Profits? Who are your customers? These answers are much more telling of a company’s success rather then how much funding they have. I understand that certain industries have high capital needs, but software companies just don’t need the funding in most cases.
Any snake oil salesman can convince an “investor” to give them money (trust me I learned this first hand and walked away from the money). Find enough investors who don’t know what they are doing and you can raise a lot of money. You can have a horrible idea, no experience, and still get money. None of this matters though if you can’t convince a customer to give you money for your product or service.
Here’s how we fix this issue. STOP GLORIFYING FUNDING. Let’s focus on who has the best customers, the most revenue, and even the most profit! I would love to see articles written about “Company X has a customer retention rate of 97%”, instead of “Company X raised $500,000.” Until we begin to see this paradigm shift, the Triangle will continue to produce mediocre businesses on average (we have a few stud companies but most don’t stack up to competition from other areas). After all, customer’s funding your growth if the best market validation!
Feel like I’m crazy and don’t know what I’m talking about? Please share your thoughts in the comments below. I welcome educated discussion!
