I am often asked to raise money for companies. I often ask what problem the company solves. The founder tells me of features and functions. I ask about the problem they solve. The founding team shows me use cases and examples of problems the features and functions solve. I ask what customers represent the uses cases. The team shows me slides of the world where everyone needs what they have. The story culminates in a vision of universal acceptance and a solid bottom line.
But who is the customer? What problem do you solve, and how much will you get paid?
Sometimes you don’t make revenue from the user. Enterprise software users are a vast network of people under a corporation who writes the check. The customer in this case is the end user, and the revenue customer is the corporation. In the consumer model each user is your customer, but the advertisers are often the revenue customer.
Revenue customers are not end users. If the end users is paying for the product, and there is a revenue customer, then you have two customers. You must design your company to address both the user and the revenue customer. It is a much simpler story if they are the same person.
Never lose sight of how to make your story clear. Dont let the facts and figures lose the customer or revenue customer’s passion for your company. Don’t forget that features and functions are different to each and they really do not capture the value. Raising money for your company comes first from the revenue customer who can validate your model. If your end user is a product to the revenue customer, eg. advertisers, then keep in mind what your product really is. Tell the story of why you need to raise capital in this context, and I won’t have to answer the question again. Good luck!