How to Get Investors to Chase You

This past week, a friend told me, "I just need to investors to give me some money."

It surprised me. He didn’t even have a product prototype yet and wasn’t working on one.

Despite being a go-getter who makes even me envious, he was stuck in the same holding pattern that traps most first-timers. He had the subconscious belief that investors grant permission to pursue your idea.

I get it. I fell into this trap too. When I went from hacking away at side projects to aiming for a startup that could change millions of lives, I thought funding was the first step.

But this mindset is backward.

Investors are not the gatekeepers

Investors don’t decide whether your startup succeeds. Your customer does.

By “customer,” I mean the person whose problem your product or service will solve.

For a hospital EMR tool, it’s the administrators who buy it and the doctors and nurses who use it. For a patient app, it’s the patient themselves.

What’s the right first move?

Build a basic prototype. Show it to your customers. Prove your idea solves a real problem, and that people will pay for it, even if it’s just a prototype held together by duct tape.

Some of your favorite startups began with rough, ugly prototypes.

I knew a founder who built an AI language tutor before ChatGPT existed. Before investing time in a fully functioning AI, she tested customer demand. How? By hiring humans to tutor users while pretending to be AI. She built a user base, refined the product, and proved people were willing to pay, all before developing the tech.

Starting with the customer is critical because it forces you to focus on solving real problems rather than chasing investor validation.

Besides, no investor wants to invest in a half-baked and unproven idea.

The Common Startup Mistake

Here’s the wrong workflow:

1. I have an idea.

2. I pitch it to investors to get funding.

3. I use the money to build a beautiful product.

4. I hope customers will buy it.

Compare that to the right workflow:

1. I have an idea.

2. I build a scrappy prototype and show it to customers.

3. I gather feedback and iterate.

4. Customers love it. Some even pay for the rough version.

5. I seek funding to scale it.

Special Case for Academic Doctors

For doctors, there’s an exception to starting with customers: building for academic or intellectual curiosity.

I’ve done this myself, like building an AI algorithm to diagnose bone tumors with colleagues at Stanford (stanford.edu/~drkaleel). These projects are valuable, but they’re in a different category. For most startups, the customer is the ultimate test.

Actionable Takeaway

If you’re thinking about launching a startup, the first step isn’t pitching to investors.

It’s putting together something your future customers can test. Whether it’s a clickable demo, a simple website, or even a series of mockups, your prototype’s job is to start a conversation with the people whose lives you want to improve.

Investors follow customers. Build for them.

If you do it right, investors will be chasing you.

Need help navigating the funding side of things after getting customers? I’ve written a checklist to simplify the process. Check it out here.

You’re Invited

If you’re in San Francisco for the JP Morgan Healthcare Conference, join me and other health tech leaders this coming Tuesday at 5:30 PM.

Let’s discuss how to build solutions that matter, and how to get them into the world.

Best,
Mohammed