The advantage of no funding
Having no funding was a huge advantage for me.
A year after I started CD Baby, the dot-com boom happened. Anyone with a
little hot air and a vague plan was given mil ions of dol ars by investors.
It was ridiculous.
Most business owners I knew would tel you about their businesses by talking
about their second round of funding, their fancy encrypted replicated load-
balancing database server, their twenty-person development team, their nice
midtown office with a pool table, and their weekly promotion parties. When you
asked what the business actual y did, they couldn't explain it clearly.
Then they would talk about LOI, ROI, NDAs, IPOs, and al kinds of things that
also had nothing to do with actual y helping people.
I'm so glad I didn't have investors. I didn't have to please anybody but my
customers and myself. No effort spent on anything but my customers.
I'd get weekly cal s from investment firms, wanting to invest in CD Baby. My
immediate answer was always “No thanks.”
They'd say, “Don't you want to expand?”
I'd say, “No. I want my business to be smal er, not bigger.”
That always ended the conversation.
By not having any money to waste, you never waste money.
Since I couldn't afford a programmer, I went to the bookstore and got a $25 book
on PHP and MySQL programming. Then I sat down and learned it, with no
programming experience. Necessity is a great teacher.
Even years later, the desks were just planks of wood on cinder-blocks from the
hardware store. I made the office computers myself from parts. My wel -funded
friends would spend $100,000 to buy something that I made myself for $1000.
They did it saying “we need the very best,” but it didn't improve anything for the
customers.
Never forget that absolutely everything you do is for your customers. Make
every decision—even decisions about whether to expand the business, raise
money, or promote someone—according to what's best for your customers.
If you're ever unsure what to prioritize, just ask your customers the open-ended
question, “How can I best help you now?” Then focus on satisfying those
requests.
None of your customers wil ask you to turn your attention to expanding. They
want you to keep your attention focused on them.
It's counterintuitive, but the way to grow your business is to focus entirely on
your existing customers. Just thril them, and they'l tel everyone.
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