A few months ago, over an entertaining and always-enlightening dinner with one of Atlanta’s most active investors and entrepreneurs, he expressed an insight elicited among the West Coast investor community that still resonates heavily in how we build Rivalry. The insight revolved around investments into companies with real customers. Only a month or two earlier, Lance wrote a very prescient blog post on the necessity to build real business now.
In both instances, I couldn’t agree more.
“What the heck is a real business?” I asked the investor. Paraphrased: “A real business is one where the majority of customers are not venture-backed, Pre-Series B business. This is not to say investor-backed businesses are not real businesses (Rivalry is venture-backed), but when an entrepreneur looks at the numbers: 3/4 venture-backed businesses fail. Running a business where the majority of your customers will not be in business within a relatively short period of time is a warning sign.
There’s a sales strategy used by many to target the most recently funded companies announced on Crunchbase. I do not discount this strategy when it comes to getting a paycheck, however, when looking at the 5-7 year horizon of business, I personally focus my attention to businesses and industries that are recession resistant: financial services, insurance, commercial real estate, and telecommunications just to name a few.
Thanks in part to the mentors, writing, and insight from Atlanta’s investor community, Rivalry has not only evolved our product but also our messaging within the past 12 months. Quick elevator-pitch-refresher: Rivalry is software for your one on ones. One on ones are most effective management tool a leader possesses. We make sure one on ones happen, are productive, and documented. Re-positioning both the product and messaging has helped us bring on customers including General Electric, At&t, IBM, LG, Mass Mutual, RentPath, and many others you’d recognize. This shift is a testament to our extremely talented team and a large tip of the cap to many of the wonderful mentors and writers in the Atlanta community.
Here’s to building real businesses with real customers.