I ignored this advice and learned one of the biggest entrepreneurship lessons
So here I was, ten years ago, working on being an amazing entrepreneur. For that to happen, I had to have a product that VCs could invest in, or so I thought.
I’ve created a company with a co-founder that helps students pick their careers. It turned out to be a massive market need, and we felt the demand increase yearly.
We’d finally built a company with over 100 B2B clients, and we impacted around 1.5k students. We even started to get some local competition.
Our product was an offline event that was sort of a “career choice” experience.
We worked on perfecting and growing it day after another.
Then we went into our eye-opener and company destroyer — an entrepreneurship summit. There were over 1000 startups at that summit.
We got exposed to the entrepreneurial community of the world with their fantastic tech products. They had AIs that could recognize your emotions based on facial recognition. They had intelligent chatbot assistants that were unstoppable.
Some of those startups have raised millions of dollars, while others were in ideation. We were fascinated.
So then, after our second year of operations, we started thinking that we do not have a scalable product, which is true. It’s not scalable. But it’s paying the bills.
We acquired a grant and felt this was our liberation to become one of the truly giant startups.
It sounded easy. We already have a market need. All we need to do is to deliver our “experience” differently so that it would be able to reach millions at the same time.
So then, we worked on a few ideas about a VR product that delivers the same value.
Companies loved it. They gave us access to their facilities to shoot in 360 degrees and create this experience for our students.
Then we determined that we needed investment to grow this product ideally. So, one of the most prominent investors and mentors recommended us to a VC.
They contacted us and we arranged a meeting. Then we started working on our financial projections, business plan, and everything.
We figured out the only way to build a scalable product includes an element of sacrifice and fear. We will never move forward if we are still using our time with our old product. So, after a couple of years of operation, we decided to kill the offline product.
This was the right thing to do based on the teachings of many entrepreneurs.
A school principal would call us, saying, “The students loved the offline experience; why would you change it to an online one? “
All we could think of is that we are the entrepreneurs, not them. We need to make our product scalable for the future. Steve Jobs said customers don’t know what they want. So let’s just tell them that the new product will be better.
So our meeting with the VC was coming up and we met with another investment banker from a different VC who said something I will never forget.
We told him about our plans to kill our offline product and work on a scalable online product. Then he said, “Do what you want to do, but NEVER kill a money-making product. You have a product-market fit. People want your product. Keep providing that.”
This resonated for a while, yet, when we think of all those startups growing massively and raising more funds, his above sentence vanishes from our minds.
Our concern was that if we accepted the VC’s investment offer, they would insist on us continuing with our old business model to get any ROI.
They raised that concern, and we were sure of it.
But we had a vision; we needed to impact thousands of students simultaneously. So, we held our ground. We put our foot down. The old money-making unscalable business model dies on that day.
Now the world was open to us. We have a market need. We have customers. All we need to do is perfect our product so that they would love it. So, we went to provide something that one of our mentors advised: working on a VR product that provides the same experience.
This was in 2015, and we were confident that the masses were not ready for a VR product. The intelligent mentor would tell us that this is not for now. It is for the future. He was probably right. But there was a problem.
We needed massive cash to maintain our costs and keep perfecting our VR product with almost no revenue. We needed a money-making product.
We hustled for a few years with some ideas and different business models. Some were good, but none were as sustaining as our offline business model.
Seven years later, I still remember the investment banker’s face when he said, “Never kill a money-making product.”
This guy was teaching us business 101 when we were lured to advanced entrepreneurship.
When I work on any business or venture, like writing here on Medium, I always have that investment banker’s words pinpointed in the back of my mind.
If something makes you money, someone wants to pay for it. Hence, similar to how this person gave me a lesson in my business life, always remember — “Never kill a money-making product”
