I am working hard with lots of start-up clients on their business models. One of the critical issues that we keep coming back to is "who is the customer."
In my model the customer is the person who pays the bills. There might be users, stakeholders, investors -- but the customer is the person who pays the bills.
I find a number of smart business owners that are designing the model of the start up who believe that the business needs only to aggregate users to their product/service-- and that will create a value that will be purchased by a venture capital firm.
They want to run on the fuel of investment from stage to stage, from phase to phase, until they have built enough perceived value that they can secure a significant round of capital at which point they think they have hit the gravey train.
This feels very "1990's bubbley" to me. But my lack of enthusiasm for this model seems to be a significant barrier to my earning their business to do business development marketing. I end up "arguing" with a potential client which never bodes well for sales.
So, my question: Can the VC be the customer?