Startup Exercise: What can't be solved with money? (2011)

Summary

What can’t be solved with money, are the most valuable things. When pitching an investor, one of the key things you need to communicate is how the important problems facing your business can be solved with money, because money is what they are providing. Even if you’re not raising money this is a useful exercise, because if you’re good at the things money can’t buy, you’ll remain competitive even when confronted by a well-funded competitor. So, it’s useful to separate the aspects of your business that could be improved with money alone, from what instead requires time, attention, intelligence, and even luck. Team Finding good people is almost impossible. I have this blog, a nice Twitter following, attention in my local community, and social “favors” I can call in, and it’s still almost impossible. And the thing about great people is they always have options: Existing job, other excellent offers, the freedom to not work for a while, etc.. If someone handed me a million dollars it wouldn’t help me find an awesome person; they’re just scarce. Once I find someone, however, then money helps a lot, because I could satisfy large salary requirements, handle relocation, provide a signing bonus, lease a car, or whatever else is necessary to make money “not the issue.” So if you’re raising money and you don’t have your team assembled, the investor knows that handing you $200,000 won’t fix that. Whereas if you have the team, but they’re working only in their spare time because day jobs pay the mortgages, that’s a good reason to raise money. Marketing Marketing of most sorts can be solved with money. Money means you can spray ads everywhere. Money means you can try 20 campaigns even if most utterly fail. Money means you can try 50 titles/descriptions/landing pages through AdWords until you find one that converts decently. Money means you can fund a Freemium offering. One big exception is anything that requires authority, like blogging and social media. You can’t buy authority. Y...