1. Has Validated Customers. This is one of the core rules … Do you know in advance that you have customers who are willing to pay the price you are asking for the product or service you have? … A successful startup scales its growth on the basis of proven, steady and paying customers (especially where residual/subscription income is involved). Steady acquisition is also a very good sign, as opposed to high and low fits and starts.
This reminds me of the “you had me at hello” scene in the Jerry MacGuire movie. That’s all I need to read on. This person is working from the real world.
But the list holds up as it continues … Cheryl cites 2.) strategic perspective, 5.) good communications, 4.) transparency, and — another favorite of mine — 3.) what she calls “cash conservative:”
There’s never been a better time to start a business in many respects, but there’s perhaps never been a more challenging time to obtain early stage credit or funding. Lean operations are the name of the game, and the ability to stretch and conserve early stage funds, even if greater funds are available, is a significant sign that points to future success.
While I like this, and she’s quote right, I do wish she hadn’t framed it around the funding. Funded startups are the rare exception. For the vast majority of startups, reality is starker than this. It’s about not spending money you don’t have. Period.