Every startup and business at some point in its life would go through some problems and by problems here I am referring specifically to financial ones. All businesses whether new or old, need a steady stream of cash flow be it in the form of sales, licenses, grants, loans etc to stay a float and pay for things like rents, rates, salaries, insurance, patents amongst other things.
So what does a startup whose CEO co-founder has put in a lot of money into the business, to pay for all sorts of things over the years, as well as go through a healthy grant from a government backed body do when all funds are exhausted and other team members are bootstrapping for their lives and in need of paying? Nothing other than work harder in attaining those highly required funds from somewhere. Anywhere.
I would like to a relate an encounter that took place not long ago when I bumped into a well-known digital entrepreneur and startup mentor upon relating the above sob story to him. By the way, this encounter took place at a coffee machine in massive co-working space and lasted no more than 5 minutes.
I was just sitting on my laptop at that moment going through emails replying back to important people, when I realised who he was and ran to him like a mad man. I related our sorry financial predicament to him and in true entrepreneurial spirit asked me a couple of questions.
One question was “have you sought any grants?”, to which I replied “yes but we exhausted it all.”
His reply to that was rather unexpected but very logical and that was “have you gone back and asked for more?”
My brain frazzled at that moment momentarily as I thought to myself “durrrrr, it’s so obvious why didn’t we even think of that.”
I said “no we didn’t. We didn’t know we could even do that.”
He said in a deep pan looking way “well do it then.”
I thought to myself “okkkkkkkk”, looking a bit befuddled and bamboozled expecting to hear something more out of the box.
He then went on to ask me about whether I knew who or what SwiftKey was all about.
I replied in a child like eager manner that “of course I did. They were acquired by Microsoft recently for like $250 million dollars.”
He replied “good” and proceeded to tell me a story about how they too went through a government backed grant and were running into financial problems when then they re-applied for a second helping of that fund. They got it obviously. Otherwise they would have existed after that. Maybe.
He then finally gave me what I was really looking for and asked me “do you want to be hero?” I replied instantaneously “YES.”
He said “go and make sales or take orders from customers. Isn’t that one way to be seen as a hero in the company?”
I replied “absolutely.”
He proceeded to carry on telling me about some other related stuff as I walked with him back to the elevators waiting for any more gems to be dropped by him. Alas, it wasnt, but thats all I needed to hear.
I shook his hand and thanked him immensely for what was a really important but fundamental advice for any startup.
I immedieately rushed back to my laptop and email our CEO whether he thought about re-applying for that grant again.
I also looked deeper into our prototype and business plan and sought to find ways of getting any sales or confirmation of future sales.
Anyways, it is after all the purpose of any business/startups to be making money, right? Otherwise it just becomes a charitable endeavour, but even they make money to pay for their staff and what not.
It actually begs the question of what line of business are you really in if you are not making any money whatsoever at all? hhhhhmmmmmm…….