![]() Why take this approach instead of chasing new rounds of funding? Forrester Research calls today the “ age of the customer” because the Internet has made an unprecedented amount of information available to consumers on demand.Ĭustomers now know more about a company’s products, services, pricing, and reputation than ever before.Ĭustomers now know more about a company’s products, services, pricing, and reputation than ever before. More than that, startups should put world-class customer service at the heart of their business model in order to get ahead of competitors. They should work to understand the very first customers they acquire and start building meaningful, ongoing relationships from the get-go. To reverse this, founders should think about the company they want to become and not the company they are today. So it’s no wonder that so many CEOs spend so much time chasing investors during their companies’ earliest days and too little acquiring customers. funding is on track for a banner $70 billion year, exceeding the $56.4 billion high of 2014, with much of that growth driven by the tech sector. Twenty-four new, billion-dollar unicorns also came onto the scene in that period, compared to just nine in the same quarter a year ago. In the second quarter of 2015, according to additional research by CB Insights, VC-backed companies raised $32 billion across 1,819 deals globally. The impulse to join the gold rush is easy to understand, given the mind-numbing amounts of money VC firms are doling out these days. There’s no one cause for that high mortality rate, but these are a few of the more common reasons tossed around during postmortems:īut while it’s true these are common culprits, there’s another that rarely gets talked about enough: Too many startup founders obsess over investors at the expense of their customers. ![]() What’s more, the majority of new tech startups - 55% - die before raising $1 million. If attracting heaps of venture capital is supposed to vouch for a startup’s potential, then how come so many of them wither and die a short time after they’re funded? Recent research by CB Insights shows that tech companies typically shutter within 20 months of their last financing rounds, with 70% dying before raising $5 million.
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