Why Customers, Not Investment Dollars, Validate Your Company

What benchmark do you use to evaluate the relevancy of your startup or expansion stage business?

For some, it’s the amount of venture capital they raise. The more money they receive, the more it validates their product and confirms their purpose.

But as Rod Ebrahimi writes for Fast Company, that’s not the way that early stage companies should be measuring success. In reality, he argues, the only validation a young company should should need is paying customers who can’t live without the things the company creates.

Unfortunately, Ebrahimi argues, there’s a growing faction of technology startups that are doing the opposite: building products they hope will appeal to venture capitalists and angel investors, rather than real people with real problems. That mindset, he writes, is a symptom of entrepreneurs feeling pressure to keep their businesses afloat and investors hoping to uncover the next big thing.

So, what can be done to change it? Ebrahimi, the founder of debt management software company ReadyForZero, says startups and investors need to get back to looking at the true purpose of investment dollars: a tool that helps reach milestones and a means to an end, not an end in itself.

For more details, check out the full article by Ebrahimi.

Josh Zywien
Josh Zywien
Content Marketer

Josh is a Content Marketer at Ambassador which gives marketers the tools they need to grow customer relationships and drive revenue through word-of-mouth, referrals, and recommendations. Previously, he was an Account Executive at CBS, Inc.
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