Running Startups Without External Funding
It's relevant for revenue-based rather than growth-based startups
Bintoro Agung - 6 January 2020
Funding is an essential and integral part of startup operations. Without funding, it is very likely for a startup to lose before competing.
If it says so, then is it possible for a startup to operate without funding? The answer is probably. Fresh funds are obviously substantial for just daily operations or “burn-money” for promotion.
The truth is, startups can do without funding. This is so far the most relevant option for revenue-based rather than growth-based startups. The following are a few steps for those consider running a startup without funding.
Fixed financial planning from an early stage
With this option, financial planning should be fixed from the very beginning. Without funding, startups must have a detailed calculation of whether the revenue earned from consumers will be greater than the cost spent to acquire consumers.
It’s not only for the early startups but also for mature businesses. Moreover, it is important to be aware of the remaining cash. Drastic steps must be taken when there is only enough cash available for operations in the next six months.
Achieve Product-Market Fit
Startups need parameters to find out whether consumers really want to spend on their products or services. It is important for us to know the product can be the best solution for its users.
The problem is that there are no truly scientific parameters for finding product-market fit. But there are three things that can at least be used as indicators, namely product use, customer retention, and sales activities.
There is no such thing as another metric, it’s only profit
Having a product that is widely discussed by the public is certainly good news. But high traffic, positive engagement, can’t possibly become the right substitute for mature sales and marketing strategies.
Such metrics are often become the early startups killer. They are fixated on pursuing something that doesn’t really impact sales or user acquisitions. Another thing to avoid is investing their money and time and resulting in sales and marketing strategy that won’t last long.
Original article is in Indonesian, translated by Kristin Siagian