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Entrepreneur Office Hours: Issue #199
The (entrepreneurial) struggle is real!
I don’t know who needs to be told this, but I’m going to tell you anyway: entrepreneurship is hard.
If you’re struggling, that’s OK. Heck, that’s expected.
For whatever reason, I’ve encountered multiple entrepreneur breakdowns this week. They’ve ranged from founders on the verge of tears because a deal is falling through to founders ready to shut down entire companies with millions in funding because running teams is turning out to be a much bigger responsibility/burden than they’d ever thought.
They’re all exhausted.
More importantly, they’re all confused.
They’re looking around at all the other entrepreneurs around them who seem to be “crushing it,” and they assume they’re doing something wrong because things don’t seem nearly as easy for them.
That’s not what’s actually happening. All those other entrepreneurs around you who seem like they’re effortlessly gliding toward successful unicorn status are equally as exhausted, equally as frustrated, and equally as jealous of everyone else.
Because entrepreneurship is really, really, really, ridiculously hard. Even when it’s going well, it’s really hard.
Never forget that. Just because you’re struggling, it doesn’t mean you’re worse at it than everyone else. It just means you only have inside access to your own work, and you’re not not seeing the struggles of everyone around you.
You’re doing great! Be proud of what you’ve accomplished. And please — PLEASE — if you need help, talk to someone.
If ChatGPT is showing us anything, it’s that most entrepreneurs are wildly confused about what startups are actually supposed to do.
As much as it pains me to write this, the most valuable startup lessons are never learned in a classroom.
Office Hours Q&A
Hey Dr. Dinin,
Everyone says that in order to raise VC money you need traction. But what if you need money in order to build your product?
How are startups supposed to get enough traction to raise VC before they have the funding to build a product?
It feels a lot like applying for jobs. Companies only want to hire people with experience, but they need to hire those same people before they can actually have experience.
Is this all some kind of rigged game???
Looking forward to your explanation!
I disagree with your premise… both in relation to raising VC and getting a job.
In fact, let’s start with your point about getting a job and then connect it back with raising VC.
You’re assuming working for a company is the only way to get experience, but that’s not true. There’s no rule requiring you to be employed in an industry before you can do relevant work in that industry.
For example, I tell any of my Duke students who are on the hunt for post-graduation jobs to consider regularly posting on social media about the industries they’re interested in and/or doing independent research projects related to those industries in order to have real-world examples of work product to share with potential employers.
In other words, you don’t need a job to gain experience in an industry. Spend time learning about the industry on your own and do your own projects related to that industry. Not only will this give you experience and make you more knowledgeable, you’ll also look like someone who’s a self-starter and self-motivated, which will make you more attractive to potential employers.
But, of course, you’re not reading this newsletter to get a job. You’re reading it specifically because you’re an entrepreneur running your own company, and you want VC funding.
Raising VC without a product is similar to getting a job without “experience.” If you absolutely can’t build a product before having investor capital, then you have to demonstrate traction in other ways.
Specifically, you don’t need a product to prove the three things VCs want to see, which are:
Access to demand
Willingness to pay
Even if you don’t have cash to build a product, you don’t need cash to talk to people. So go talk with lots of people who have the problem you’re trying to solve! Doing so will help you prove it’s a real problem and prove you know how to reach the people who have it.
In addition, if you’re tackling a genuine problem, you won’t need a product to convince people to pay for the solution. People who have the problem and feel significant pain from it will commit to paying before you have the solution built. In some cases, they might even be willing to pre-pay.
Trust me… if you can get enough people pre-paying you before you even have a product, I guarantee VCs will see this as having great traction.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!