(Dornfeld Management Group, Jan. 08, 2007)
There are many missed opportunities to engage and communicate with your customer regardless if you are a start-up, hospital, retailer, etcc… As noted in the previous blog there can be great upside when engaging in brainstorming and improving your product. But there can be a downside as well if you do value the time and feedback of your customer.
Blog post today on the DMG web site about deciding when is the right time to wind-down a start up venture.
The obvious answer is when you run out of money and in many cases that is a reality, but many companies should have enough data and market insight to wind down a company well in advance of depleting their bank accounts.
Relationships with investors (regardless of family, friend, angel or VC) should be considered long term opportunities. One of the panelists presented a great story about an entrepreneur friend who was able to return about 70% on the dollar back to the group of investors once the entrepreneur realized that the business was not going to succeed. Although I am sure all parties would have preferred a more positive outcome, the entrepreneur was able to establish trust and credibility with the investors. This trust allowed the entrepreneur to raise funds from the same group of investors a few years later for a new venture because they understood this entrepreneur was a good steward of their money.
The story also highlights another important concept; most entrepreneurs are serial entrepreneurs and will have many ideas through the course of their life. The greatest success an entrepreneur can have with their first venture is that they learn to be a successful entrepreneur. There will be many opportunities to make money so the primary focus in not money but understanding how to develop an idea into a successful company.
