Show Me the Money

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About a month ago, I was freelancing at a startup in lower Manhattan. One day, the founder returned from an investor meeting in which he fielded many questions about the company’s progress. Towards the end, apparently one of the investors bluntly asked “when are you going to start making money?” This investor was older, at least 80, and we all had a chuckle about how he probably won’t be around when that day comes. The founder told us this story out of frustration.

The investor asked a fair question. When someone gives you a chunk of his hard-earned cash to build your dreams, he is completely within his rights to demand a return on his investment and founders have to learn to deal with this. This investor was doing the company a favor. He reminded everyone that none of the other shit matters: how many Twitter followers you have, the Facebook likes, all the cool new features the product will have, all the hard work you’re putting in, and so on. None of that shit matters and he doesn’t care. Like Rod Tidwell said, show me the money. That this particular investor was older doesn’t surprise me; he has seen enough bullshit through the years and his time is precious. Either show him something worthwhile or don’t waste his time because he would rather see his grandkids.

As developers and entrepreneurs, we need to remember this. None of the bullshit matters. When startups tell me how great their work environment is, how they were featured on TechCrunch, how they’re backed by celebrity XYZ, and so on, no one cares. Are you making money? Are you even close to it? We need to get back to the basics. Unless it’s a non-profit, companies exist to make money. All the other metrics people use to accentuate how great their company is doing doesn’t matter unless it direcly translates into a healthier bottom line. If that’s not the case, it’s just background noise meant distract you from the giant sucking sound of investment dollars going down the tubes.

It’s okay if your startup is not profitable. Obviously, startups don’t make money immediately and at least one of the most successful companies on the planet, Amazon, notoriously lost money for several years. But don’t say you’re killing it when your company hasn’t made a nickel yet. Stick to the basics. Tell investors how you are getting closer to generating revenue. That’s all they care about and that’s how it should be. When are you going to start making money?

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