What Does Every Startup Need?

In chapter two of Mark Twain’s The Adventures of Tom Sawyer , Tom is directed by his Aunt Polly to paint her white picket fence. It’s a Saturday morning and the last thing Tom wants to do is work while his friends are out on “delicious expeditions.” Being the enterprising young man that he is, Tom sets out to convince his friends to do the painting for him. Tom feigns complete engagement with his painting while his friends pass by and, sure enough, Tom’s interest in painting the fence proves contagious. Each of his friends wants to try his hand at the “awful particular” task, and they all end up trading valuable “worldly wealth” in exchange for time painting the fence. Tom reaps, among many other items, “a kitten with only one eye, a brass door-knob, a dog-collar — but no dog — the handle of a knife, four pieces of orange-peel, and a dilapidated old window sash.” All very prized possessions for a boy in Hannibal, Missouri circa 1876.

Ostensibly, Mark Twain’s story is for kids, but it also contains some valuable and transferable lessons for old folks, as well. Tom learns that to persuade someone to purchase something, he needs to make it as valuable and as desirable as possible. He says to his friends,

“What do you call work? . . . Does a boy get a chance to whitewash a fence every day?”

Tom Sawyer offered a keen insight on entrepreneurship. What does every startup need? Money? Technology? No, those are good, but not sufficient. Every company needs customers! The best entrepreneurs win customers by making a product so valuable that people start lining up to buy it. When we were growing Gridlogix in the early 2000s, being in the midwest made it difficult to raise money. So we didn’t. Instead we focused on winning large purchase orders first. That pressure forces the company to focus on what really matters to the market. If you can’t get the order, does anything else really matter?

At iSelect , companies with customers, even paid with “One Eyed Kittens”, pique our interest. A notable example is Tallyfy , a UK based company that recently moved to St. Louis. Tallyfy makes it easy for companies to track and improve critical business processes. While Tallyfy is raising money to grow, they followed Tom Sawyer’s lead, landing two Fortune 50 companies in St. Louis as paid customers. With customer’s first, Tallyfy is right to expect investment capital to follow.

While some startups have sell-able products like software, others in biotech might signal customer interest with grants or contract research. An entrepreneur just needs to find a real customer or entity that cares enough to offer a bit of “worldly wealth.”

Instead of raising capital to find customers, entrepreneurs find customers to raise capital.

Is the entrepreneur alone in this endeavor? No. As part of a “ Pay it Forward ” culture, we each have a role. Big companies are creating venture groups to find innovation. However, they should first learn to be good customers, letting in the new innovations already knocking at your door. Are your company bureaucrats saying no to entrepreneurs knocking on your front door? Would you want to sell to your company?

While iSelect is in the business of financing early stage companies, we don’t myopically pursue this goal. We strive to help companies throughout their life cycle and, in many cases, this means facilitating customer acquisition first.

If you believe, as we do, that entrepreneurs make America great, help an entrepreneur paint their fence, buy their product.