Winning with Winners

A new post from CBInsights about the 'Recycling of VC Dollars' sparked me into action to pen a blog post I've been meeting to write..... 

Silicon Valley is a false economy. Many companies have an interesting idea, raise capital, launch product, get buzz, get early customers, and then fizzle like a flat soda that’s being sitting in the refrigerator for months. Why is this?

Because many of their customers are also startups themselves. They feed off each other. Startups as customers use their VC capital to buy the latest and greatest software packages, helping create website 'logo' noise for each other. In reality many of the products don't solve real needs, don't apply to a broad base of the market, and promote wrong business decision behaviors. Most of these companies fail with short-term winning.

It is critical from the early stages of product launch that a company finds real, linchpin customers that will be customers for a lifetime. Build your customer base with real companies. Your first customers should be your longest tenure customers in the years to come. 

This was also one of the points made in my favorite product management book called 'Inspired - How To Create Products Customers Love' by Marty Cagan. (I'm sure I'll reference it more).

Win with winners. Don't fall into the Silicon Valley trap of shift VC money from one startup to another in something called ‘revenue’. It's really a false economy.