Preconditions for Starting
Good and bad reasons to hold off on starting a startup.
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Preconditions for Starting
Today’s post is unusual because it came from an ODF interview instead of a text message exchange with a founder.
Most founders have preconditions for starting a company.
Finding an excellent co-founder is an understandable precondition.1 Some founders simply won't start a company solo. I get it — a startup can be lonely even with an equal partner building alongside you. The best co-founder pairs are also far greater than their individual parts.
A worrying precondition is when a founder says they'll start a company only if they can raise money or get into an accelerator.
The funding precondition can cause investors to question just how committed the founder is to building a successful startup.
There’s nothing wrong with raising money early on or being realistic about capital needs. After all, many can't forgo a salary for a year while bootstrapping a company (those that can are at an advantage). The risk here comes from seeking validation from investors instead of customers, and letting that determine if you move forward with building the startup in the first place.
In the early days, it’s best to validate the market with prospective customers. For some startups (I call these “rapid fire startups” — where you can go from zero-to-MVP in 30 days or less), you can even get an actual product to them quickly.
Starting with customers instead of investors is doubly beneficial: first, you can reach paying customers sooner.
Second, the more you can do to confirm customer needs and ability to pay, the better your future conversations will go with investors.
If a financing challenge occurs at the series A, investors want to know that the founders they backed at the seed stage will do whatever is necessary to keep the company alive. By making progress ahead of the first fundraise, founders can show that they are not waiting around for investor approval.
Additional reading: Customers understand before investors do
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A co-founder is by no means essential — several of the most formidable founders I know, including Celine from Loyal, John Andrew from Wander, and Adeel from MagicSchool, are building their companies solo.