For many entrepreneurs “raising money” has replaced “building a sustainable business” as their goal. That’s a big mistake.
He’s not a VC, but Steve Blank may as well be a VC given the amount of time he spends helping others build their businesses and the brand name recognition he’s achieved in startup communities around the world. His latest post encapsulates the best advice for founders on when to raise outside money.
Like a lot of Steve’s posts, this one is really about priorities. Building a business should be a founder’s first priority. Raising outside money should serve, but never replace, the #1 priority of building a sustainable business.
As the world knows by now, President Obama is taking a tough stance against patent trolls that could result in new regulation and significant changes to U.S. patent law. I got the chance to go on Bloomberg’s Money Moves this week to comment on the president’s initiatives, and this is the video of my appearance. I start talking at about 3:00.
Proprietary merchandise is when a company builds its own brand with e-commerce as its core channel. By offering goods which are not available anywhere else, customers have to buy them directly from the brand. In this way, you own your own margin and you don’t have to compete with other sites selling your brand.
This is the core of the strategy of players like Bonobos in menswear and Warby Parker in eyewear. As I’ve spent the last six years of my life pursuing this strategy, I have a lot to say about it. Suffice it to say that I’m extremely long this business model, it is my life’s work, and that the only “issue” with it is it takes time to build a brand. At the end of the day, you’re not building an e-commerce company, you’re building a brand that has e-commerce as its core distribution channel. The difference is subtle but momentous.
Indeed. From time-to-time, I like to highlight “VC wisdom” that I find around the web, so why not highlight “founder wisdom” when I find it?
Bonobos CEO Andy Dunn wrote a fantastic Medium post about the challenges of building a meaningful e-commerce business. It should be required reading for any founder who aspires to build the next Zappos, Warby Parker, Bonobos, etc. I’m not going to try to summarize his blog but will just post the link. It’s that good. If you have the time, you should head over and read the whole thing.
(Thanks to my buddy Daniel for showing me this.)