I worked with a company a little over a year ago that had big plans – refine marketing, raise a pile of money, and expand across the world. Problem was that really was their plan. They had no plan to win customers or make money.
An organization of a small handful of people, this company was more interested in getting a larger office, hiring a lot more staff, and living off investors than they were in making real money from real customers. Sure, getting customers was important, but secondary to raising money. Months were spent on refining investor messages, meeting with potential investors, and pitching up-and-to-the-right growth charts.
I engaged with them because they wanted help refining their revenue plan. I helped, then left them with a question they couldn't answer: Why not put your energy and effort into winning customers, make real money your families can spend, and grow your business internal?
The product was sustainable in the market, customers could be reached cost effectively, sales cycles were relatively short, and money was to be made. They just weren't interested in making money; they wanted investors more than they wanted customers.
Anita Campbell has a nice post about Bootstrapping Your Way to Success. She points out an interesting reference statistic, 38 of 100,000 businesses require outside financing.
What do you think? Is bootstrapping the way for most businesses to go or is the better paths seeking an investor to quick start growth?