Early Stage Startups Don't Need Money, They Need Customers

It baffles me to no end that the Canadian government is not leaping on the startup trend. It's an observable fact that a lot of Canadian talent heads south for more money and opportunities, but no-one seems to care enough to do anything about it. Meanwhile, the US passes the JOBS act to allow even more early-stage startup funding.<p>I lived in and around Vancouver for two years and absolutely loved it, but my visa expired and I had to leave. These days I live in NYC and, well, I love it here too, but my visa in the US is very restrictive- I can't start my own company, for example. The US seems to have an endless, protracted debate about immigration that has next to nothing to do with economic or political reality. Canada doesn't, and has a <i>huge</i> opportunity to attract international entrepreneurs that want to do business in North America. But I have absolutely no immigration routes back into the country, and there's no change on the horizon. So I won't be heading over the border any time soon.

While it is not as sexy, it's worth noting that "funding" from customers is generally cheaper than funding from investors. Plus, once you have revenue, you generally become more interesting to investors and have more leverage in those conversations because you may not need the money to survive the way you do early in your company's life.<p>We're a "revenue-backed" startup so I'd say that if you can do it, it is a great way to control your destiny. The challenge with this method is that growth comes after revenue, i.e. you spend generally after you have sold the product which means growth is slower while fundraising allows you to spend ahead of revenue.<p>Nevertheless, good to see this advice on HN.

I think there aren't enough resources for Canadian startups but at the same time, I agree with this post that once you can show some traction, then funding is not as hard to come by. The trick is figuring out how to get to that point and pay the rent.

In reality, the problem ("what founders fail to do") is far more pernicious because it always <i>seems</i> like you already know the problem you're solving and what your target customers want. But then you go out and talk to people who are deeply interested, but who don't buy for <i>some reason</i>. And you wave your hands and explain why they aren't an exact fit, assuring yourself that the faceless others you know to exist are your real targets. But there are no faceless others, just more people who all have their own bizarre edge cases that don't quite fit how you genericized your vision before you had any customers.

Depends on what early-stage means. If that means no funding money, then this statement is simply not true in many cases. Suppose you're tring to sell software and support. How are you going to sell a 1-year support contract if the customer can tell there's no guarantee you'll be around in 3 months? I'm speaking from personal experience. OTOH I'm sure the situation is better for web startups that are selling a service on a monthly basis.

The chart still shows that startups raised $227k on average in the discovery phase.<p>The problem is in Canada there's noone willing to invest at this stage, at all. The angels here are known to only invest in later stage startups.<p>Although I agree the focus early on be on customers... its still hard to be 100% focused on customers if you're also constantly concerned with how you'll pay rent.

Woohoo gets the karma on my post! Unfair ;)