Thomas has just published a good post entitled My take backs from Seedcamp Week 2012 last week. This comes shortly after Tine writing that Revenue is the new black and Paul Graham’s post on Growth of Startups followed by an even better follow up my Marc Suster entitled Is Going for Rapid Groth Always Good?.
Really busy articles all around at the moment and many of them ring true and all of the writers have my deep respect. Tine and Thomas actually were at Seedcamp together, which is where the revenue part comes from. I already had a conversation with Tine and a few others on that topic on twitter yesterday. In short, already there, I raised the point that it is not about shifting strategy in light of investors preferred solution.
And then Thomas comes back with the same point. New York now seems to be an attractive place to start a business and this time I can at least agree. The point that New York seems to be interesting is because it is good for business, not because there are many VCs. This is why we chose Cologne to start Ormigo and Adcloud. For business, it is perfect, and A LOT better than Berlin. We have a great train connection to Brussels or Paris, as well as other cities plus two great airports nearby. Investors can be found if you are doing well anywhere.
Then comes to idea of a move to B2B because, as Thomas puts it, the B2C times are over. But let’s go though his examples: eBay was started in a garage and grew like crazy right from the start. Amazon managed to raise a lot of money, but is not in VC city and actually many believed it would fail. Facebook grew hands over fists to start with and Google actually tried to sell to Yahoo! (read The Search) while foursquare has had its up and downs, as well as Pandora. What they all have in common is founders that were committed and really wanted to do what they do and change something really big. They were all not started because there was a trend to follow. They were all not started to “build a platform”. You don’t do that from the start. You move step by step. You solve problems. You have a vision. You want to do what you do. You really do. And yes, believe it or not, there will be other platforms that will be built.
And then comes the “profits are important” bit. Oh damn. OF COURSE THEY ARE. You have to show that something works and sell a vision and most importantly, you need to be convincing in explaining that what you want to do will work. That will work wonderfully with amazing growth and a clear opportunity to make money from that growth, as well as simple revenue growth that is scalable. There is not one answer to all of this.
The most important thing is to do what you want to do. Because as Mark Suster says in his post:
- Some businesses take a bit longer to percolate.
- Some entrepreneurs can make a dent in a smaller world.
- Are we not subtly convincing too many people to “go big or go home?”
Do what you love, and do not follow a trend of consumer startups, or growth fokus, or b2b or whatever. Build what you want and build it right. Learn from others how to build a good business and what is important.
And if you believe you will need venture capital or angels, then talk to them to understand what they believe will be important in your specific case for them to invest into your business. Remember to still focus on your business, have different options and try to find the right investor for you that really believes in your vision as well.