Boom Supersonic secured non-binding Letters of Intent (LOIs) from major airlines early. This demonstrated market demand was crucial for convincing suppliers and investors to commit the significant capital needed for development, turning customer interest into a financing tool.

Related Insights

Boom Supersonic is adapting its proprietary jet engine, originally for supersonic flight, into "SuperPower" ground turbines for AI data centers. This strategic move provides a path to profitability years sooner, generating the massive capital required to complete its Overture passenger airliner project.

Don't wait for a prototype to get traction. Hardware founders should first engage potential customers and demonstrate a profound understanding of their specific problems. This expertise builds the necessary trust for customers to commit, even before a physical product is ready.

When demand from a large customer outstrips your production capacity, propose a strategic financing arrangement. Ask them to help fund your expansion in exchange for a guaranteed volume contract, such as by pre-paying for a large future order or co-investing in a specific equipment line.

Comfort offers customers a discount to 'pre-order' items, even if they are in stock, in exchange for waiting longer for delivery. This generates immediate, upfront cash flow that the bootstrapped company uses to fund large inventory purchase orders without external capital.

Instead of building its final passenger jet, Boom first developed a smaller, sub-scale prototype to prove its Mach 2.2 technology. This startup-like, sequential approach proves the core concept at a much lower cost, making the capital-intensive project more manageable and fundable.

When traditional metrics like ARR or DAUs are unavailable, ambitious hard-tech startups can leverage large, non-binding Letters of Intent (LOIs) from future customers to validate their vision and attract early-stage investment.

Avoid the classic bootstrap vs. raise dilemma by using customer financing. Pre-sell your product or service to a group of early customers. This strategy not only provides the necessary starting capital without giving up equity but also serves as the ultimate form of market validation.

Boom Supersonic's move to power data centers with its engines isn't a failure, but a strategic way to fund its capital-intensive vision. This mirrors early Tesla's survival tactic of doing contract engineering for other automakers. Such projects can be a crucial source of non-dilutive capital for deep tech companies.

Crisp.ai's founder advocates for selling a product before it's built. His team secured over $100,000 from 30 customers using only a Figma sketch. This approach provides the strongest form of market validation, proving customer demand and significantly strengthening a startup's position when fundraising with VCs.

Validate market demand by securing payment from customers before investing significant resources in building anything. This applies to software, hardware, and services, completely eliminating the risk of creating something nobody wants to buy.