Friday, 11 April 2014

How do you compete with companies that get more than 10 million in funding.

It's no surprise that tech startups in the last few years have received more funding then they are worth. If you are interested you can always google a company with the words "startup capital" or "investment funding". You will be surprised on how many ideas get million dollar evaluations.

What's worse is that now reality hits and these companies and they are not as profitable as they would like to be. That's every business's problem but at the same time. Making even 100 dollars can be challenging let a lone 10 million.

If there is any lesson I had to learn in life it is the lessons that ideas are worthless without execution. I always say whatever happens in reality is what really happens. What happens in your mind never happens.

This is of course a hard lesson. In university a professor told a story about the muses in class. If you don't know the muses are the gods of inspiration. They would "talk" to people and inspire them to create. It's very perceptive as creative people tend to have a flash of inspiration.

Later that day a friend said to me "John I really think the muses talk to you. You have so many ideas". In university I discovered coffee and I did have lots of flashes of inspiration. Suffice to say, I am an idea guy. If you flash forward a few years until after I graduated, I was confronted with the 2008 global financial crisis and the harsh reality of nobody caring about your ideas. It wasn't until about 2 years after I graduated that I heard that I could get funding for my ideas.

It seemed simple enough, I could pay myself more than I was making and of course money cures all right? Anybody who actually produces and tries to sell a product will realize that even 1000 dollar loan is hard to pay back let alone a 500k or 2 million dollar loan.

I thought about it but declined. Luckily. I said, there is no way I could get a good ROI on any investment.

How do you compete with companies that get funding. Simple. Produce a product, sell it, listen to your customers, stay small, improve and repeat.

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