🎙️ In this episode, we speak to Partner at Black Ops, Gerald Black, about how founders can focus on solving real problems instead of building ventures that prioritise fundraising first and solving user pain points second. With fundraising harder and founders finding themselves in a pinch, the macro seems to be exerting overt influence on how founders position and build their businesses.
“You should not be building a business to raise money,” says Gerald Black, our guest on this month’s episode of the African Pre-seed Podcast. His comments come at a time when the “funding winter” has entered our vocabulary, and any tech newbie now knows that the mantra is “focusing on the fundamentals.” 💡
📍 Why hasn’t there been a conversation on building real businesses and how some founders wrongly approach building startups before now? One answer is that quite a few businesses and their founders appeared to have built businesses strictly to attract VC funding.
The underlying assumptions of those businesses were always questionable, or the argument for them being venture-backable may have been flimsy…but these snake-oil merchants had mastered the art of carefully putting together a story and selling it to investors. We’ve seen a few of the world’s biggest VCs taken in by startups that now look questionable: WeWork, FTX, Messenger, Byju… just to name a few.
“If you’re building to raise money, there’s something really flawed there. The essence of raising is to scale that solution,” Gerald adds.
To be clear, there are other arguments for raising money, one of which is the idea that somtimes founders are working on incredibly difficult problems that require audacious and expensive solutions. đź’¸
Whether you’re scaling an existing solution or trying to solve an incredibly difficult problem, you should be ready to be the champion for your startup. You also need to have domain expertise that gives investors confidence in your ability to execute.
💠Without giving any spoilers, Gerald also shares some of the questions to ask if you’re hoping for a successful exit. Two of those questions are around your conviction and figuring out where you are. The third question is if you have what it takes to take this idea from start to finish. If you don’t, do you have the right people around to help you scale?”
Alright, time to get into it! - Olumuyiwa (Contributor and Writer, African Preseed Podcast)
What to look forward to in this episode:
- Gerald Black's journey to exit [06:15]
- Competing in a saturated market [08:14]
- African founders prioritizing fundraising over addressing real problems [17:02]
- The systematic process of identifying customer pain points and building ventures effectively address them [21:27]
- The role of "Operators" in startup ecosystem growth [30:51]
- Staying warm during the funding winter [34:16]
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