Entrepreneurship is hard; are you in it for the right reasons?
Do you need the flashy pitch-ready Chanel boots, or will your reliable, scrappy old soles get your business where it should go?
The Raise Rush
We had just closed an angel round, oversubscribing at $1M. My startup was entering the textile industry with a ground-breaking fabric innovation. I grew up in this industry and have a passion for fabrics that offer more to consumers. What more can fabric do than clothe, enfold, upholster, and convey culture? The idea of enabling traditionally passive materials which have been around for thousands of years to regulate temperature, convey physiological information, store data, provide a health service, or become active, digital conductors is my dream.
Imagine what applications this can have.
Fabrics have many touchpoints in each of our lives and the opportunity to innovate in this area is expansive. The industry, formerly male-dominated, was ripe for innovation in 2013 when I began developing a patented innovation in fabrics. I was an excited female founder. I remember the delight, elation, and sense of achievement after raising funds: “Wow, people believe in me, my product, and my company.”
I felt the company was on top of the world. We continued to work hard and efficiently, putting our nose to the grindstone, working long hours, being scrappy, learning new tasks, taking on more than we thought we could handle, and going out of our comfort zone. Late one evening, preparing to orchestrate and run a board meeting, I felt like a fish out of water. Yet, I was also invigorated to learn and build my business. I was giving it my all!. At the end of the day, the best part was that we had a product to sell: it was ready for the market.
Next up: revenue, we need revenue. Several months later, while preparing an investor update, the deep level of care, time, and energy I wanted to be focused on revenue and selling was instead going to investor relationship management. Between term sheet development, share strategy, board seats, startup lingo, and fundraising we had to watch our bottom line. As the fundraising gyre became evident—it was clear our energies were drifting from our central focus. What ensued was significant time and energy placed on non-selling activities, and the excitement and success in raising money, pleasing investors, and the euphoria that ensues became an elixir of sorts. Giving us a surge of immediate energy but the residual effects didn’t feel so good. It was hype that I recognized as false.
Successfully convincing high-profile people to invest and having funds in the bank thanks to the right pitch could be remarkably alluring. I remember returning from our second pitch only several months after closing our first round in preparation for another round of funding, and feeling as though I’d entered a gravitational pull that wasn’t breakable.
We were caught in this cycle of chasing funding versus sales, customer engagement, and product. It wasn’t a good feeling. To quote Michael Lutz, CEO of Gammalink, a Silicon Valley venture, “Raising money has become a disease. Entrepreneurs are wasting lots of brainpower scheming to raise money.” This encapsulates the nagging feeling I had.
All aboard the entrepreneurial bandwagon?
A crucial question for new entrepreneurs: are you building a product or service consumers want, or are you jumping on the entrepreneurial bandwagon for vanity, anticipated clout, or something else entirely?
Everyone on LinkedIn seems to be a founder, entrepreneur, innovator, imaginer-in-chief: how many of these people began with offering a product or service based on customer needs or even excitement about a product or service? Did they begin with a fabric that cools you, leggings that make your butt look better, the best fitting Little Black Dress, a digital fabric that shares information through an app, or fibers that can send and receive information? I have launched or helped launch all of these products out of the desire to see them in the market, and the right vessel for doing that was a startup.
It was only as the Chief Product Officer at AFFOA, where I joined their founding team, that I realized I am what people call an “entrepreneur” and have started several companies that would now qualify as startups. I founded my companies because I discovered the convergence of doing something I love and market viability, offering consumers something they truly connect with and love—not creating a resume line item or chasing buzzy titles for myself.
I’m the daughter of two entrepreneurs who owned several businesses: my father, a textile gin and transportation company, and my mother, an artist and maker. I spent many hours in my father’s office toying with cotton and exploring fibers; with my mother, helping her craft her latest design in the home studio. I simply thought they worked at what they enjoyed in order to make a living. It didn’t occur to me that they were entrepreneurs, risk-takers, and business starters: brave, accountable, and doing business to do what they love. Not until I sat down to my second company’s first board meeting, having helped build one of the most successful female-founded companies, SPANX, whose founder was named the world’s first self-made billionaire in 2012 did it dawn on me that I was an entrepreneur. Work and love converge in today’s semantics as entrepreneurship.
By the Bootstraps
When I began hearing terms like startup, fundraising, term sheet, investors did I understand that the game had changed. It felt as though I was working to fundraise, to hire a board, to proclaim we’re a startup instead of asserting that I was following my passions. The focus felt wrong but irreversible.
Are modern entrepreneurs there to figure out how to create revenue OR how to fundraise? Can startups exist today without all of those terms? There is an argument for circling back on the ultimate goal of providing inspiring products or services to consumers, creating revenue, financial security, and fulfillment. As Harvard Business Review explains in Bootstrap Finance: The Art of Start-ups: “For the great majority of would-be founders, the biggest challenge is not raising money but having the wits and hustle to do without it. To that end, it helps to understand what it takes to start a business—and why that is likely to conflict with what venture capitalists require.”
Are the days of bootstrapping and building with no outside investors behind us, or is there a balance? Reflecting on the four startups I have been a part of there is value in equalizing the need for funding and speed to market with honoring the goal of providing valuable products or services to consumers. In turn, you can build revenue, create a company of value, and support employees as you make an impact together.
Consider leading your business and your pitch around a true North Star. Say, “I have this amazing product that does this thing and I’d love to share it with you!” Keep the eye on the reason for your startup—what you love—and don’t let the tail wag the dog in your aspirations. If you do, you won’t even be able to say that you own a startup.
Check out Neil Patel’s blog, where he dives deep on bootstrapping: The Definitive Guide on How to Bootstrap Your Startup. The visualizations themselves offer simple explanations of complex problems founders face.