Monday, July 22, 2013

Investors are Optional


Entrepreneurs with small ideas can also build great companies, your business can grow organically, with revenue and profits by selling to customers as early as possible from the idea incubation.

"Your most unhappy customers are your greatest source of learning." --Bill Gates



Business incubation involves the nurturing and mentoring of new businesses, often referred to as startups or entrepreneurs, to help them succeed in their respective industries. Incubators provide various forms of support, including physical workspace, access to networks, mentorship, training, and sometimes funding.

Objectives:
The primary objective of business incubation is to accelerate the growth and success of startups by providing them with the necessary resources, expertise, and support systems. This helps reduce the barriers to entry and increases the likelihood of survival and sustainability for new businesses.

What incubation stage are you? Are you Chasing customers? or are you Chasing Investors?

Consider these Equations:

Customers = Validation, Revenue, Profits, Valuation, Funding

Investors = Distraction from chasing customers, outside capital

A good strategy:

Business = Customers (Revenues + Profits).

In this equation, outside financing is Optional.

There are several entrepreneurs who built great companies using this strategy.

Sridhar Vembu, CEO of Zoho built a $200milliion a year revenue starting this way.
 
Examples of established companies also using this strategy:
Amazon, where CEO Jeff Bezos often insists on leaving an empty chair at meetings to represent the "customer's voice," encourages employees to build experiments based on customer insight. Innovations such as shopping cart recommendations and behavior-based search were first implemented by an intern, resulting in a three percent revenue increase. Zara, the Spanish fast-fashion company, analyses observations from store managers daily to better understand what customers want. Every day, store staff chat with customers, asking questions like, "What if this skirt was longer?" or "What other colors would you like for this item?" This has allowed Zara to meet customers' expectations 99% while producing ten times the number of products as its largest competitors. Business incubators measure success based on various metrics, including the survival rate of startups, job creation, revenue growth, successful exits (e.g., acquisitions or IPOs), and overall economic impact on the community.

As an entrepreneur with a proven business model and execution capacity you will have no capital gap

It may take time, sweat and tears, but like every dream you live, it comes with invaluable benefits including personal and business growth.

I Wish You Great Success

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