Sarah Prevette: ‘Fall in love with the problem’
Sarah Prevette's advice to the Big Omaha crowd focused on passion for a solving a particular problem rather than a creating a specific product.
Sarah Prevette's biggest advice to entrepreneurs is to focus on the problem — not the solution. Prevette is the founder of Sprouter, a website that serves startup founders and connects them to resources. She spoke to the Big Omaha 2012 crowd today at KANEKO about finding passion in the problem. "If you have a problem that you've dedicated yourself to solving, you can always change the product," she said. "You keep iterating and changing it." Here's the rest of her advice for startups.
You have limited resources
Focus — don’t try to do everything. "When things’s aren’t going well, don’t try to run 100 experiments by trying to find different products and services," she said. Find out what's working and pull all of your resources into making that work.
Users are not customers
There's a difference between people who pay for your product and people who don't. To entrepreneurs who are building a big user base and figure out how to monetize later, Prevette's message is simple: "Stop immediately. Please come talk to me afterwards — I will pull your head out of your ass." Prevette emphasized a focus on monetizing and getting customers. "Ship early, ship often, ship fast, and make sure people are paying for the value that you're providing," she said.
"Your job is to get customers," Prevette says. "Your job is to sell your vision and get people to use it." If you're part of a small team, you have to be the salesperson. Even if you don't like sales, "get over it," she says.
Cash flow is everything
Know what money is going into your business, how much is in the bank and how much is going out. "You've gotta know your runway," Prevette said. She advises startups to make a dashboard and monitor six things: committed monthly recurring revenue, cash flow, customer pipeline, churn, customer acquisition cost and customer lifetime value.
"The idea of spending thousands of dollars on accountants and lawyers seems a little asinine," Prevette says. But when you're closing or selling a company, those documents are important — they can make the difference between being successful and crying into your pillow at night, Prevette says. Get a lawyer, get an accountant. Get all important agreements in writing.
Strive for success, prepare for failure
It's a roller coaster — there are high highs and there are low lows, Prevette said. "You have to be prepared for the fact that there's going to be a lot of failure, and sometimes you're going to have to walk away," she said. "But you need to act like you're going to build the next big business." But the ultimate answer: don't give up.
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