I had to take a moment yesterday because I got a note from a happy Eventup venue that made me remember the most important rule when building companies: Build Real Products With Real Value
In everything I’ve done in life, it was all about making money or generating revenue, whether it’s consulting for companies helping them drive traffic to drive revenue growth or for my own sites. I’ve always had a plan to focus on revenue or making money.
When you’re building a “startup”, a focus on revenue too early on can hurt your ability to build real value with the products you create. When I started Eventup I asked myself, “what is it that venues want and need?”, the constant answer was “we want more bookings” or “we want to generate more revenue”.
So, I spent some time up front and picked up a phone and talked to venues (what would be supply side of the marketplace I set out to build). After that, I spent some more time talking to recent brides, corporate event people, and just general consumers, trying to understand how they find venues. At the end of the day, I knew it was a difficult process, having produced a couple conferences and planned MANY industry dinners. But, I needed to hear it from others, from my would be customers (or, the demand side of the business). At the end of the day, I needed to spend time up front to understand the wants and needs — without this, how do you build real value in business?
I see an ecosystem and hear of companies focusing so hard on trying to sell services, boxes, or products that don’t really provide that much value to their customers. They aren’t an order of magnitude (10x) better than anything out there. Also, they don’t solve a real need.
The key isn’t to generate revenue for revenue’s sake, otherwise you’re just forcing an equation that will fizzle at some point. Or, you end up with massive operational inefficiency because you’re like a junky looking for that next fix (or 50-100% growth month). I’ve been there, I’ve felt that pain and I understand it really well.
I worry when I see more energy spent on convincing people to buy shit than is spent on just making better shit.
— Chris Sacca (@sacca) May 30, 2013
Without building real value into the products or companies you create, how do you expect to generate return customers? By spending time listening and understanding what is needed, you build around the needs of a base of customers. You end up with happy customers, you end up with repeat business, and you’re not forcing revenue like a child forcing a circle into a square.
Real companies build real value by building real products that address real problems. End of story.