I was recently mentoring this entrepreneur who had developed a product, had 10 beta customers and was preparing to raise a round of pre-seed financing to take his company to the next level. He wanted my input on his business plan and pitch deck so I agreed to sit down and have a look.
The first question I ask when I meet an entrepreneur in fund raising mode that has almost-ready-for-prime-time product and beta customers is “why are you raising money and what are you going to do with it?” Seems simple enough, right? The answer, however, surprised me.
He said, “I’m going to spend it on marketing and building up my sales pipe line.”
To which I responded, “What about the 10 beta customers? Are they going to buy your product or not?”
Response: “Well… the beta customers don’t seem very motivated and several have concerns with the product and/or haven’t found time to evaluate it, etc… so I’m going to execute on my business plan and raise money to get more customers looking at the product.”
To which I responded (with as much calm as I could muster), “Don’t you think you better figure out why the beta customers aren’t buying before you start thinking about scaling your business up?”
Response: …. Blank stare.
The reality is that building a company or shaping an idea out of nothing is not as simple as following a well executed plan. You can’t just ignore something (especially customers) when it isn’t fitting in with the way you think things should be going. You have to embrace the situation and throw yourself into the weeds and start figuring it out!
At the beginning it may look like a big mess… and quite frankly, it probably is! Entrepreneurship is like that and if you can’t handle getting messy then this may not be for you.
Personally, I’m compulsive about order and finding symmetry and efficiencies. I’m constantly looking for ways to simplify a situation or line it up with something else related to the strategic direction I’m going… basically, I’m constantly looking at how to clean up a mess.
I was in a great meeting last night with a bunch of the leading Michigan entrepreneurial community representatives that meet regularly to discuss how to best address the needs of Michigan Entrepreneurs. At one point there was a debate on what are the best processes to put in place to streamline the initial engagement between the various organizations and the entrepreneur that walks through the door… we call it “triaging”. The debate was focused on how much of an automatic process should be involved compared to a more resource-intensive one-on-one engagement.
We were basically looking at the messy aspect to entrepreneurship and trying to decide what system or process should be in place to best improve efficiencies and use of limited resources. They were dealing with the very essence of entrepreneurship and, as I believe, it is very messy.
The people around the table all had good ideas and part of the strength of our Michigan entrepreneurial ecosystem is that we have many people all trying to help each other and help rebuild and grow our economy in a new direction.
The key, however, is to recognize entrepreneurship can have a messy side and the approaches to helping entrepreneurs can be varied and complicated. Meet-ups, one-on-one sessions, courses, and mentoring are all available to anyone who has a burning desire to take the plunge or at least find out more about what entrepreneurship is all about.
Don’t get me wrong, developing plans, looking for efficiencies and structure to enable sustained value creation and strong growth are critical elements to entrepreneurship and taking great ideas and making them real… just remember that sometimes things will get messy and you’ll just have to deal with that!