When it comes to funding your app startup, there are two primary approaches: bootstrapping and taking investment. While raising capital can be a great way to get started, many founders make the mistake of prioritizing valuations over creating value for their users. In this article, we'll explore the importance of focusing on driving value rather than just seeking funding.
Bootstrapping vs. Funding Your App Startup
The traditional approach to building an app startup involves taking investment from venture capitalists (VCs) or angel investors. This can be a great way to get started, but it's not the only option. Bootstrapping, or self-funding your startup, is a slower method of growth that requires a lot more effort and dedication. However, it also teaches valuable lessons about creating value for your users.
The Importance of Creating Value
Too many app startups focus on making an exit rather than solving a problem or delivering a valuable service to their customers. This leads to inflated valuations and a distorted view of what entrepreneurship is all about. According to Bloomberg, the amount of real value that many startups are creating is questionable. In fact, many experts call this phenomenon the "startup bubble."
The Dangers of Overfunding
When money is easy to come by, it loses its value and meaning. This leads to a culture of overfunding, where founders pivot their ideas multiple times in an attempt to find success. However, this approach rarely ends well. Pivoting once can be helpful, but repeated pivots often indicate a lack of direction and passion.
The Power of Tenacity
Ultimately, the single best predictor of success is how hard you work. While luck plays a role, and spotting and hiring talent is important, tenacity and passion will always win out in the end. It's not about being passionate about your idea or sticking to your initial game plan; it's about driving value for your users and customers.
Ask Yourself "Why?"
Before you start building your app startup, ask yourself why you're doing it. Is it to make a quick buck, or is it to solve a real problem? Are you passionate about creating value for your users, or are you just looking for fame and fortune? The answer will determine the course of your journey.
Conclusion
In this article, we've explored the importance of focusing on driving value rather than just seeking funding. Whether you choose to bootstrap your startup or take investment, remember that tenacity and passion are essential characteristics for success. Don't get caught up in the hype of overfunding; instead, focus on creating a valuable product that solves real problems.