The path to market is unpredictable. For startup Equal, the private market was initially sluggish while NHS contracts provided early revenue. Later, the private market accelerated. Pursuing different verticals with varying sales cycles creates a more stable, 'continual drip' of revenue.
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Committing all resources to a single demand trigger is a post-product-market fit move. Early on, founders need a broader approach to discover the repeatable patterns of demand. Only after identifying this pattern from early customers can you confidently build a concentrated "tollbooth" around it.
To generate cash flow and secure commitment before their product was mature, Qualia sold multi-year deals paid entirely upfront. The key was framing it as "pay for one year, get four free," which made the value proposition a no-brainer for early adopters and funded their development.
For EdTech startups, pivoting from D2C to B2B school sales is challenging, with long sales cycles. However, it creates a stickier business not subject to seasonal dips and, more importantly, provides equitable access to students in underserved communities, not just affluent families.
In industries with long sales cycles like healthcare, early traction isn't about dozens of logos. For YC's Demo Day, Aegis focused on securing just one large medical billing company as a happy, paying customer. Deep engagement—evidenced by data sharing and product co-development—is a powerful early signal for investors.
To achieve rapid, bootstrapped growth, don't choose between a service or a product. Start with a hybrid: a product with a service aspect. This allows you to generate immediate cash flow and validate the market with the service, while using that revenue to build the more scalable product asset.
For owners planning a future exit, the MSP model is far superior to a reseller's project-to-project structure. The stable, predictable monthly recurring revenue (MRR) from multi-year contracts is highly attractive to investors, creating a sellable asset independent of the owner's sales prowess.
Merge intentionally avoided charging its first customers. Once enough pipeline was built, they "turned on" revenue to manufacture a rapid growth story ($0 to $1M in 7 months), creating powerful momentum for fundraising, hiring, and marketing.
Jumping to enterprise sales too early is a common founder mistake. Start in the mid-market where accounts have fewer demands. This allows you to perfect the product, build referenceable customers, and learn what's truly needed to win larger, more complex deals later on.
Large enterprise clients are often diversified themselves with multiple departments and divisions. A powerful de-risking strategy is to leverage your existing relationship as a proven vendor to get introductions and sell into these other parts of the organization, effectively diversifying your revenue stream within a single account.
To break into slow-moving hospitals, Aegis initially targeted smaller, more agile medical billing companies that serve them. This strategy builds a proven product and case studies with customers who have a direct need and faster sales cycles, creating a powerful entry point to the larger hospital systems.