Creating a startup often leads companies down a certain path. The path usually has pushes the founders to two areas: investment and product. Both are massively important for a company to scale to heights of some of the famous startup stories like Facebook, Uber and Airbnb. Often what’s missed is a crucial part of any business. Your customers.
Our investment story
We were raising a £1m investment round and I thought it was our last chance to really grow. We had previously raised other investment to get us to this point but I felt we were at make or break. Also our cash was running out. We had one really strong VC lead that would be able to push us to the next level in Twine’s story.
They rejected us. By email. They wrote 2 sentences after I’d been waiting for 4 weeks for them to get back to us since our last partner meeting. I’d spent hours in meetings and on due diligence. The reason they didn’t want to invest was that we weren’t making enough revenue. I felt incredibly frustrated as I had been clear from our first meeting what our financial position was.
I started to worry about where the next round was going to come from. The team discussed the options and I was super stressed.
Then I got an email from a potential customer. They wanted to proceed on the deal that we’d offered them few weeks ago. It was a really good creative brief on Twine that would be valuable for us.
It hit me.
I’d spend the last 6 months fundraising when I could’ve spend that time selling to customers not investors. If customers have a need they’ll pay to have someone solve it. We were definitely solving problems for customers. The best thing, customers aren’t interested in your financial projects, your team dynamics, and all the other questions that an investor will ask. They care about you, your product, you price and whether you will help them.
Once we made this decision to focus on our customers, it became easier. 6 months on and we’re on course for our first break-even month. We’re learning more about our service than ever before and I believe are in a strong position as a result.
Also, if and when we decide to raise further investment, we will be in a stronger position as we will have more customers and more revenue.
Sometimes it’s the set backs that make you think. Focus on your customers, not investment.