I recently received a call from an entrepreneur who I first met two months ago. At the time, I had been very impressed by his team’s enthusiasm. However, as they were an unproven team coming together for the first time, I was uncertain about their ability to execute. I left them with the recommendation to develop their prototype product and build the partnerships necessary for their startup to attract its first customers.
This is my preferred approach for teams who are pursuing an attractive idea and have a can-do attitude but whose entrepreneurial abilities I can’t accurately judge in a meeting. There’s no better judge of entrepreneurial ability than actual execution, so I recommend that the team take its first steps outside the safety of the sandbox and return to me with their progress if they’re still looking for funding. Unfortunately, I don’t hear back from most teams. Some of these teams don’t return because, as I discover later on, they raise funds from another source. However, most of them simply don’t take the steps necessary to prove their ability to execute.
I was therefore pleasantly surprised to hear back from this founder. And my surprise grew larger as he began to present what his team had achieved in the last two months. They had established over 20 partnerships with key industry players. This was more than enough to measure the initial customer traction of their product. They had also built their prototype and were about to begin testing it. He was inviting me to take part in the initial tests and provide feedback so that they could improve their product by their December launch date. I hadn’t expected this much progress in this short a time period. I thanked the entrepreneur for acting on our discussion and am now looking forward to testing the prototype.
So what’s the moral of the story? You might think that it’s something along the lines of “perseverance wins investors”. This would be both inaccurate and limiting. Inaccurate because I have yet to try the prototype and see the initial reactions of other customers. We’re still far from reaching a funding agreement. However, I strongly believe that if this founder keeps executing as he has done so far, he’s very likely to secure funding from one source or another. More important, drawing the conclusion that “perseverance wins investors” is limiting. Fundraising isn’t the ultimate destination. It’s only part of the journey, and actually a fairly early stage of the journey. Ultimately, the startup’s success will be determined by customers, not investors. However, by persevering to win investors, the entrepreneur has signaled that he will also persevere to win customers. Perseverance wins not only customers and investors, but also employees, suppliers, and partners, to name just a few. Perseverance wins people, and people determine your success. So a more accurate and comprehensive takeaway would be that “perseverance breeds success”.