Seeking "strategic capital" from customers who have their own innovation funds creates powerful alignment. This model makes the customer an investor, providing direct feedback on product implementation and scaling while allowing them to share in the financial upside, ensuring a mutually beneficial partnership.
In a company seeking its next funding round or acquisition, the CPO's strategic focus must shift. The primary "customer" to satisfy is not the end user, but the next investor or acquirer. This means building a business and product story that appeals directly to them.
The old model of raising a large sum of money to build infrastructure is obsolete. Today, founders can and should validate their product and find customers with minimal capital *before* seeking significant investment, reversing the traditional order of operations.
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.
Acquired extended its business model by launching a fund that invests exclusively in its private company sponsors. The rigorous process of selecting a brand-aligned sponsor effectively serves as investment diligence, creating a powerful flywheel where business partnerships become financial ones.
Pursuing large "whale" customers for early validation is risky because they often come with heavy demands that can derail the product vision. Instead, seek out innovative, mid-level companies who are early adopters. They provide better feedback, and building traction with them opens doors to larger clients later.
By building a business funded by customers, Limitless avoids dependency on VCs. This gives them the power to choose investors who are bold and non-conformist, rather than catering to the 'sheep-like' majority who require herd validation before investing. It's a strategy to control your own destiny.
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.
Within a large corporation, an intrapreneur's success hinges on validating their idea with potential clients. Since internal investment is a zero-sum game, demonstrating market knowledge and a clear path to customer validation is crucial for convincing leadership to fund your project over competing priorities.
For large-scale B2B products, validate demand by signing customers who not only commit to buying but also pre-fund development. This model secures capital, guarantees early adopters, and ensures the product is built with direct, committed customer input from the very beginning.
By defining the entrepreneur as the primary customer, a VC firm changes its entire operating model. This customer-centric view informs decisions on partner incentives (removing attribution), community building, and support services. The result is a powerful brand that attracts the best founders and generates high-fidelity deal flow through referrals.