If you’re building a startup, always sell BEFORE you build (here’s why)

[cmw1994]

@patrickthian You’re bored huh? Haha

 

[christfollower19]

@cmw1994 Thanks, is this the one by Alistair Croll and Benjamin Yoskovitz?

 

[cmw1994]

@christfollower19 Yes indeed, great book. Let’s you pick and handle business models so much more easily

 

[seekingtruth94]

@christfollower19 Hey! Predictable Revenue is by Aaron Ross.

 

[seekingtruth94]

@613jono Inspo: When I Stop Talking, You’ll Know I’m Dead, by Jerry Weintraub. Early mentor shared it with me. Solid book.

Tactical:
- The Mom Test
- Predictable Revenue
- Early Exit (Basil Peters).

 

[613jono]

@seekingtruth94 The Jerry Weintraub book is great, especially the Armin Hammer part, 'always go where the action is' or something like that, i paraphrase because I read it years ago, but I always remembered that part. Solid motto for life. Do you have any other inspirational book recommendations?

 

[seekingtruth94]

@613jono I loved that book. He narrated the audiobook and you can hear the emotion in his voice. Its awesome.

I also like, “how to get rich” by Felix Dennis. And “the first billion is the hardest” by T Boone Pickens.

Both have cringe names, but written by successful entrepreneurs.

 

[613jono]

@seekingtruth94 Bro, how to get rich by Felix Dennis is incredible. I've read the recap for idlers chapter probably 20 times. He was such an interesting man, I wish so much that Felix narrated the book, he has an amazing voice. If you haven't seen this I recommend listening

especially the last 10-15 minutes. I'll pick up "The First billion is the hardest"

 

[thegirlwhoswaiting]

@613jono Thr Right It

 

[jmueller]

@seekingtruth94 Doesn't work if you do hardware, especially if its something unusual.

Seeing this right now on one startup, they are selling hard AF, but have nothing to show for it.

 

[seekingtruth94]

@jmueller Some ideas definitely require a threshold to be met before a customer is willing to commit.

Hardware, especially technical hardware, is surely one of them.

Thanks for mentioning!

 

[eduardolalo13]

@jmueller What’s crazy to me is I keep seeing big tech companies fall for this, even with hardware products where they have their own experts. The result is so predictable yet they keep signing with whoever promises the most, regardless of their ability to deliver.

 

[jmueller]

@eduardolalo13 In my case there is also a founder who doesn't take NO for an answer - like you hire me as an expert and I tell you 'can't be done, with constrains as is', pffffsh, 'I'll find someone who will', bitch, I've been doing this for a decade and a half and big players in the industry haven't done this as well, so I hear about this project bouncing around for 2 years now, like a case of 'I told you so'.

At this point I'm not even sure if this is gumption or plain ol boneheadedness.

 

[jessaasm]

@seekingtruth94 Laughs in deep tech.

Laughs in multi year sales cycles.

Laughs in regulated industries (pharma, medical devices, power grid, aerospace, marine, mining, nuclear, oil/gas)

Laughs in ITAR.

 

[seekingtruth94]

@jessaasm Deep tech is its own animal. So are regulated products, but you can still engage pharma or industries with long sales cycles to validate your idea.

The $250k contract I closed was with the 4th largest health insurance carrier in the country. It was a tiny contract for them and solved a specific pain point. Sometimes you hit the right problem at the right time.

Also, you can sometimes find a decision maker and sell at a price they’re willing to move fast on ($15-$20k) and expand rapidly over time once you’ve proved value. We systematically did that. Easier when venture backed though.

 

[jessaasm]

@seekingtruth94

The $250k contract I closed

That sounds like some sort of middleware software SAAS thing.

In my mind pharma means drugs. So usually drug startups that spun out of some research project. So a couple years of initial chemistry after it leaves the university, a year or two for phase 1 trials, then if your lucky and and trials are promising you get picked up by a big kid company to bring it through phase 2 and 3.

Your not going to sell shit until you have something hard to point to, likely meaning at least a few Mil of R&D if your a total shoestring company.

If your talking about something you can run out of a Starbucks and a few laptops, then sure go and sell what doesn't exist. If however your talking about a hard business where even an MVP is a few years of work (if it's even possible) then I don't feel that approach is appropriate or even ethical.... Tharanos as an extreme example.
There's always going to be some puffery with the sales and BD folks, but if the product is based on hard science and if it's not a guarantee that it's even possible, selling something that hasn't been developed yet is at best a terrible idea.

 

[seekingtruth94]

@jessaasm Yes, SaaS. You can't do this in regulated industries. Unless you like jail.

 

[613jono]

@seekingtruth94 This is a good summary of why market research is important--customer insights are extremely valuable. However, it does not apply to all startups--think disruptive technologies. In the words of Henry Ford, "If I asked people what they wanted, they would have said faster horses."

 

[silentwhispers]

@seekingtruth94 Yea thats what Theranos did lol

But great advice though and book recommendation! Just picked it up!

 

[lovelifelln]

@seekingtruth94 So investors gave 100million to someone that couldn’t do what they’re pitching, sounds legit