Last week, David Cummings posted something of a public suggestion box to Twitter, calling for “crazy ideas to accelerate the entrepreneurial trajectory of Atlanta.” As you can imagine, the responses were many and varied. However, the responses also revealed what startups need most, and it’s not money.
It’s Been Done Before
In the middle of last year, TechCrunch published a great article highlighting what they called “The Invisible Unicorns”. These are big, successful businesses that didn’t raise money, at least not early on. Many of these companies you won’t recognize, because they’re not high flying, headline grabbing startups like Snap, Uber, and Airbnb. The point of the article illustrates the reality that most businesses do not raise money to start.
Money Zooms in on the Good and the Bad
One of the responses to a response was the truth that raising money is not success in and of itself, but rather a milestone in the life of a startup and an entrepreneur. Too many people consider raising millions of dollars the mark of success. It’s not. In fact, when you raise lots of money, it actually exposes your strengths and weaknesses. You’ll just do more of both.
Revenue is Oxygen for Startups
Most startups don’t need investor capital to get revenue. Some do. Today, it is incredibly inexpensive to create a software driven startup and get the first 10 or even 100 customers. Nobody has ever said it was easy, but it does not require millions of dollars in capital. If your product offering solves a real problem for individuals or businesses, then the core product – the MVP – can generate some revenue. Then, like Mailchimp (featured above as an “invisible unicorn”), the business can grow organically and profitably.
More of What’s Working
Cummings followed up his own tweet with some of the suggestions that stood out:
Some new ideas proposed today (thanks for the feedback!):
– Co-living space for entrepreneurs
– 2nd location for @ATLTechVillage
– B2B SaaS accelerator program
– Programs for K-12 + colleges
– More exits + reinvestment
– Connect startups w/potential customers
— David Cummings (@davidcummings) February 16, 2018
None of these involve VC. All of them involve successful people investing their time and money to help startups get started, gain traction, get profitable, and build real, sustainable businesses. So, the answer to the question in the title, what do startups need? Help. With the right environment, advice, mentorship, co-founders, and instruction, many startups can be built into great businesses.
Startups need help. Once they have a good business, then they need capital to expand or scale.