TBC: Early Signals That Matter to Investors

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Hey there.

Welcome to another episode of the Back Channel. In today's episode, I want to do something slightly different. A lot of times I'll talk about red flags, we'll write about red flags, we'll record videos about red flags. Uh, but I wanna actually talk about green flags, things that might stick in an investor's mind, and, and make them feel positively about what you're doing.

And I bring this up because I was hosting a morning event. We do these Don Patrol events around the world, and as I was chatting with one of the founders, he kept saying things that really stuck it out in my mind as, as something that reflected very positively on the founder. So the first one is, as this founder was talking about his robotics company, I was like, what's it called?

What, what's your company's name? And uh, he was like, you know. Don't really have a name. Um, I don't think the name really matters right now. We're heads down trying [00:01:00] to build the right product, talking to customers, et cetera. And uh, I just thought this was such a refreshing thing to hear, uh, especially from a first time at Young Founder.

I remember my first company, my first company that got venture backed, and how long. My co-founders and I stressed about the name and how perfect the name had to be around what we were doing. And it is a fun thing to do and it, it gives you a lot of pride in your company. But I think that is such a reflection of a poor first time founder mentality.

It is so far from what is important in terms of getting to product market fit and the thing that I think a lot of founders will run into that we certainly ran into. Was some of the things that we were so attached to and the reasons that we liked the name so much. Turned out to be irrelevant because by the time we finally got to market and got something that customers [00:02:00] actually wanted, we had pivoted three, four times.

We were pointed in a very different direction, and the name, you know, had a slight nod towards what we were doing, but it wasn't dead on like it was when we, when we had first started, it was. A lot of wasted time, a lot of wasted energy. And in some cases, when you're so dead set on a certain name in a domain, it might even cost you money.

So if you're able to orient yourself to not really care about the name of your company in the very beginning, I think that's amazing. And something that might stick in investors' brains too, if you tell 'em that.

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~Secondly, this same founder talked a lot about, um, banana. ~Secondly *with the same founder. I asked him, oh my gosh, well, like robotics company, that's probably pretty capital intensive.*

*Are you raising money? Have you raised money? And he was like, you know, we have a lot of opportunities in front of us. But we can do so much in validating what the customer needs without capital, without actually building exactly what we need. And so before we raise a dime of capital, we have a whole plan around talking to customers, making sure we validate exactly what it is we should be building.*

*And man, that really blew me away. Just the amount of maturity to think about validating, with the customer before building. Uh, it is just not, not something you see in first time founders a lot, and some of you might be going, oh, that's obvious. That's obvious advice. Validate the customer. I get it. That is obvious *[00:05:00] *advice.*

But if you've never started a company before and you get into the seat and you start. Through the motion of building your company, you try fighting the urge to raise capital. When other people are are encouraging, you raise capital. You try avoiding the feeling of just building what's inside of your head and not not talking to customers first.

It can be much easier said, said than done. So let's all give props where props are due. I thought this first time founder was extremely impressive. He gave off two very strong green flags. One, not caring about his name, and two being so focused on. Uh, customer validation before you're thinking about anything else. All right. Maybe in the future I'll come up with some more green flags for you guys to key in on,

but until next time, I'll see you on the next episode of the back channel.

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