Chase Customers Not Investors

Entrepreneurs often believe that securing investments is the first step to building a successful business. However, the real key lies in prioritising customers over investors. When you focus on solving customer needs and proving the viability of your business model, investors will naturally follow. This approach has been exemplified by successful businesses, which began by prioritising customers and building a strong foundation before attracting significant investments.

1. Focus on Customers to Attract Investors

The idea that massive investments lead to success is a misconception. Many successful business journeys demonstrate that chasing customers and creating value for them is far more important. When these businesses launched, their founders focused on improving customer experience and delivering consistent results, which eventually caught the attention of investors.

Key Insight:

Capital chases those who don’t need it.

Investors are more likely to invest in businesses that have already demonstrated value and success. By focusing on customers, you create a strong foundation that naturally attracts funding.

2. Build Value Through Practical Strategies

When starting a business, creativity and resourcefulness often outweigh financial investment. By leveraging existing assets and forming strategic partnerships, you can create value without requiring substantial upfront capital.

Examples:

1. Profit-Sharing Partnerships:
   • Collaborate with property or restaurant owners with underutilised spaces. Offer to share profits instead of paying rent upfront.
   • For example, a restaurateur could partner with a vacant property owner and generate revenue without significant initial costs.
2. Skill-Based Collaborations:
   • If you lack specific skills, like cooking for a cloud kitchen, partner with someone who complements your strengths. Make them a co-founder or profit-sharing partner rather than hiring them as an employee.

This approach reduces financial risks and fosters mutual commitment to the business’s success.

3. Prove Your Business Model

A proven business model is the cornerstone of attracting investment. By starting small and refining operations, you can demonstrate the viability and scalability of your idea.

Steps to Prove Your Model:

1. Launch with a single product or location to test the market.
2. Focus on customer satisfaction to build a loyal base.
3. Track key metrics like revenue, customer retention, and profitability to showcase success.

Real-World Example:

When a hotel chain launched its first hotel, it focused on improving occupancy rates and customer experience by:

• Increasing occupancy from 19% to 90%.
• Upgrading room quality and ambience.
• Adding amenities like Wi-Fi and free breakfast.

These improvements significantly boosted revenue, making the business attractive to investors.

4. Scale Strategically to Attract Investors

Investors are drawn to businesses that show consistent growth and scalability. By focusing on creating value and demonstrating potential, you can make your business investment-worthy.

Lessons from Successful Scaling:

• The first hotel partnership generated significant profits, convincing investors of the model’s scalability.
• By growing to multiple locations within months, the business showcased its ability to replicate success, leading to competitive investment offers from prominent firms.

5. Key Takeaways

1. Focus on creating value for your customers; investors will follow.
2. Use creative strategies like profit-sharing and skill-based partnerships to minimise initial costs.
3. Prove your business model by starting small and demonstrating consistent success.
4. Scale strategically to attract multiple investors, who will compete to fund your growth.

By prioritising customer needs and adopting innovative approaches, you can build a successful business that attracts investment organically. Remember, when you solve real problems for customers, your business becomes an irresistible opportunity for investors.