Startups can't survive on an idea or a product on its own. At some point, founders need to find a way to get some funding. Whether that's through raising a friends-and-family round, spearheading a crowdfunding campaign, or attracting potential angel investors or VCs, there comes a point when a company will need additional funds. But even before startups can consider going after institutional funds, they first need to focus on developing and improving a product that consumers actually want. At a panel during Tech Cocktail Celebrate titled “Wild New World of Funding,” attendees were told to shut up and listen to the customer.
Led by Susan Cooney, the cofounder of philanthropic crowdfunding platform Givelocity, participants in the panel included Michael Hughes of OneVest, Akhil Nigam of MassChallenge, Gabriella Draney of Tech Wildcatters, and Eric Olson of Origin Ventures. Hailing from different funding platforms and organizations, they were able to provide broad range of insight on how to approach the world of funding. And besides letting conference attendees know that they shouldn't go into trying to raise funds merely to pay themselves salaries, the panelists emphasized the need for startups to focus on their customers.
“I want to see ten customer interviews. I want to know who you talked to, what you talked to them about, what you let them tell you – because mostly you just need to shut up and listen…[For] so many people, they talk a lot about the idea of ‘lean startup' and customer development, and then I see maybe ten percent of teams actually do it,” said Draney.
Before even thinking about the idea of pursuing funding, companies need to focus on the one thing that will determine whether their companies will even succeed: consumers. What are you doing to actually reach out to your potential or current customer base? How are you modifying your product to conform to their needs and demands? According to panelists, if you want to find institutional funding, you're going to need to prove that there's potential there for your company to actually hit it off in the marketplace, and you can't validate that potential until you actually go out there and truly focus on the consumer. And, really, this should be part of a startup's initial phase, according to Olson: of self-evaluating what you want or need to fulfill through your startup – to know thyself.
Other topics during the panel included a discussion on all the types of funding available to startups, as well which kinds of funding pathways work best for specific purposes. Watch what else they had to say – here's the video.