My company, Qrvey, recently announced we raised $8.5 million in funding from our investors. For startups and smaller companies, money is like oxygen. There’s no life without it. Yet, investment money itself does not create success. I have personally seen other companies continue to bring in more and bigger funding and still not be able to create a meaningful business.
First and foremost, money aside, I believe what makes a winning business is the ability to continually find new customers and make them successful. Having capital is just one out of four factors in making that happen. The other three include having the right team, ensuring the right market fit for your product or service, and having the ability to plan and execute. I go into this in more detail in my series, 4 Pillars to Become a Winning Company.
Money does facilitate a company’s ability to build a quality product, which, in the software business, is created by people. It allows you to establish a great culture and a quality team, which needs to be in place even before building your first product.
The market you are in will play a significant role in how much funding you need or how long the funding you get will last. Qrvey is in the data and analytics market, which is quite established. The majority of players in this market have been around for decades. To enter this market requires providing a product that is innovative and differentiated, as well as very polished. This mature market won’t tolerate new products that aren’t ready for prime time, whereas a new market might.
Small and upcoming players in mature markets require even greater funding. Raising $20 million is like raising a penny in the data and analytics market, considering how vast and high-potential it is. This is where being innovative can make a difference. Taking advantage of new technology, if done right, can create a barrier for the big players. I talk more about this in my post, The Secret to Winning Against the Big Guys.
It’s exciting to secure funding. It shows that the market needs what you are doing. However, I don’t celebrate raising money as much as I celebrate new and successful customers. Raising money is just a tool to help with that.
So, although it is good news that Qrvey recently raised funding, this doesn’t change our mission or the way we think. If we don’t stay focused on making our customers successful with our embedded analytics product, it doesn’t matter how much funding we get.