In the startup world, there's a pervasive myth that the ultimate measure of success is the ability to raise large sums of money from investors, especially in the early stages.

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This narrative is particularly strong in places like Silicon Valley, where stories of massive funding rounds often overshadow the more fundamental aspects of building a sustainable business.

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However, for the vast majority of entrepreneurs outside these well-connected hubs, the reality is starkly different.

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The truth is, the core objective of any business, including startups, should be to generate profits, not just to raise capital. Here's why focusing on making money from the outset is a smarter strategy for most startups.

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Validate Before You Escalate

The initial phase of any startup should be about validation, not valuation. Validating your business idea means proving that there's a market for your product or service and that customers are willing to pay for it. This doesn't necessarily require a fully-fledged software platform or an elaborate business infrastructure. In many cases, validation can be achieved through minimal viable products (MVPs), prototypes, or even mock-ups that demonstrate the concept's potential without incurring significant development costs.

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read: How to Scale From Thousands to Millions

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Revenue First: The Language Investors Understand

Investors are ultimately interested in returns, and nothing speaks louder about the potential for returns than actual revenue. By focusing on generating sales and revenue from the start, you're not only proving your business model but also showcasing your ability to drive growth and profits. This is the language that resonates with investors. A startup that's already making money is a more attractive investment because it demonstrates market demand and the entrepreneur's acumen in capitalizing on that demand.

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The Pitfalls of Being Fundraising Dependent

Relying solely on fundraising can position your company precariously. If the funding dries up, so does your business. By building a revenue-generating business from the outset, you protect yourself from being at the mercy of investors. You create a self-sustaining enterprise that's not dependent on external funding to survive and grow. This not only gives you more control over your company's direction but also puts you in a stronger position when you do choose to seek investment.

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see also: 99% of Startups Fail Because of Money

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Profit Generation: The Ultimate Business Validation

Generating profits is challenging, and many startups fail because they focus too much on the product and not enough on the business model. By prioritizing profit generation, you're forced to think critically about every aspect of your business, from cost structure to pricing strategy, customer acquisition to retention. This comprehensive approach is what builds a solid foundation for a successful business.

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Building a Business That Lasts

The most successful businesses are those that provide value and get paid for it. They start small, validate their ideas, and scale up as they generate profits. This is how most enduring businesses are built. Your startup can follow the same path by focusing on creating real value for customers and ensuring that the value is reflected in your revenue streams.

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Conclusion

For entrepreneurs and startups, the message is clear: build to make money, not just to raise it. By focusing on revenue generation and profitability from the beginning, you're not only aligning with what investors ultimately want to see but also setting up your business for long-term success. The ability to generate profits is the most compelling evidence of a viable business model and the best way to attract investment when the time is right. Remember, business is business, and at the end of the day, your startup's value and sustainability are defined by its ability to generate profits. Provide value, get paid for it, and scale – that's the essence of building a successful startup.