Richard Atkinson - Why needing money is very often the symptom not the disease
Richard is Chief Executive of Second Mile Ltd and is an experienced technology entrepreneur who has led start-ups in the cleantech, automotive, communications, defence and software sectors. This week he writes:
It’s interesting how resistant this one seems to be. I’ve lost count of how many times I’ve heard speakers say it, books say it, investors say it. Opportunity starts with customers. It’s obvious, right? Yet it’s a perspective that seems to get lost time and again. The how obscures the why.
I recently sat down with a very talented inventor. “We’re all ready” he said. “We just need money.” My alarm bells began dutifully to ring; shortage of capital is more often symptom than it is disease. So was all he needed really money?
Well, in the narrow sense that they had a product development plan ready to whirr into action if someone put coins in, yes. But in business terms, no.
As above, a PD plan doth not a business case make. What was really needed was evidence someone would write cheques for the resulting product. In this case, the oddity was that he actually had it; he just hadn’t realised its importance. One potential customer had paid towards the product development, and another had told him he could sell hundreds of a specific variant of his idea. But this was nowhere in the documents.
It’s embarrassingly simple but it bears repeating. The first plank of a business case is evidence that someone will buy the product. Crunchy evidence. Evidence that cost something to give. That evidence should go front and centre in the investment pitch. Everything else is detail; the journey finishes with customers, but it also starts with customers.