The startup’s ‘customer partners’ slide: All those logos and no dollars?
venturebeat.com
venturebeat.com
But I have to say that there is a part of investor responsibility too (at least in France), by using the risk taking tax breaks on the fund and then refusing to invest it with people who have not yet found the right product/market fit, everybody is incentivized to lie about their development stage. And in B2B you can lie buy presenting revenue generated through selling professional services.
First, politically I think that when creating your product you might want to keep the cards close to your chest, so in-house consultants who lunch alternatively with the product engineers and the customers is a way to do that. My second political idea (gotten from "crossing the chasm") is that you don't kickstart platforms, you start a killer application and if you get success, you open it to third parties, you can't start as a platform, you mutate into it.
What I have seen happen tho, is sales people pressured or rewarded for either the generated revenue or the gross margin they generate. The easiest way to generate a sale is by selling man hour, because the delivery date is set, it can be quick at the quarter's or fiscal year's end, and there is no real fiddly evaluation of the delivered features (the consultant was there or not). The other trope is that sales people are attracted by big companies (for the brand recognition and the gross margin), where investments are complex and slow to move on, but man hours are bought on the running budget, not on investment, and the sale can move way quicker.
And so, by selling man hours at famous big co, you can put a logo and some revenue on your investor's slides. You still haven't found a product/market fit but you have earned some time before it is discovered.
Users of my free app were asking for services that I could perform. I didn't want to perform the services myself forever but I had zero platform, processes and people in place to achieve that on day one. So I performed the services myself.
This gave me a solid understanding of the customer problem and what I'd need to code up to enable service providers to perform the service directly with customers.
Now I perform zero services with all of my service providers connecting directly with customers. We take a percentage cut as a true marketplace.
The chicken and egg problem of two-sided marketplaces is hard. If you're building a meals-on-wheels service and you need to cook the meals yourself to get the supply side going: do it.
* Preferential payment terms - a large co will say, "If you offer better pricing than you offer to us, you'll automatically reduce our rate to the new low rate offered." This ensures you can't price gouge them, but it also ensures that if you price correctly, telling other businesses that's your lowest rate will potentially make them more likely to close.
* Large customers that are household names instills a trust with a firm that helps them close deals with companies that are smaller in the B2B space in particular (5+ years in sales doing professional services, friends who run similar firms, etc).
* It's not only sociopaths (per the first comment above, lol) who can close deals with name brand firms. I fully agree it's probable some who raise money are sociopaths.
The phrase, "Manage your own psychology," has really stuck with me after I heard from Sam Altman in that Stanford class - knowing more than a few people who've been under a lot of stress in their role over my life has really helped me understand that we all crack in our own unique ways when the pressure cooker starts to heat up. (edit, spelling).
This isn't about pretending to be big, it's about pretending to have real signed customers during a pitch. I expected it to be about pretending to be big by puffing up team size.