Sugar Daddies rot your teeth

We're not done yet with the "investors are bad for you" train of thought. Upon further reflection, and comparing the entrepreneurs who have a Sugar Daddy with those who don't, it's obvious to me that Sugar Daddies slowly rot away at the "teeth" of the entrepreneur.

By "teeth," I mean that extra bite, that fire in the belly that makes an entrepreneur more effective than other people, that makes him find an answer, a way to succeed - no matter what life throws at him. I also mean that sense of ownership, of being the captain of your own ship, being the person who makes the final decision and who does what he thinks will be best for his customers, employees, and company.

When you are self-funded, you have only one source of revenue: your customers. You must please them, or there will be no revenue. Every decision you make is driven by what you think they will go for - or not.

When you are working with an investor, you don't think of customers first. When you need more money, you naturally turn to the investor, where the other money has come from. He's your first and last resort. He is your safe harbor. You know you can count on him to get you through the quiet patches. You have the luxury of having money coming in, even when you have not done what you needed to do to attract more customers to your business.

So, you are beholden to him. You owe him. You have to keep him happy. You must take his advice, good or bad. It is rare that an investor thinks like a customer, so his advice will often conflict with what customers want.

Two entrepreneurs I know demonstrate the differences between the self-funded entrepreneur and the entrepreneur with a Sugar Daddy. Each is in a market that has potential to grow. There is a need, there are potential customers, and they have the skills and products to meet the customer's need.

The entrepreneur who is self-funded is always pushing. Every minute he's working, he's like a house on fire. He hired me to help him. My customer interviews revealed that his customers loved his product but didn't find his documentation very helpful. We also found that one of his salespeople was misrepresenting the product.

He didn't waste a second. We discussed the best ways to proceed, and we went to work. We set him up with a person who could edit and rewrite his product documentation (English is not his first language). He created new product training demos, something he's actually very good at, in a way that will help both prospective and current customers. He's hiring new salespeople, training them thoroughly and making sure they answer customer questions honestly and accurately.

The point is, he didn't hesitate. He understood exactly what to do, and he did it.

Contrast this with the entrepreneur who has a Sugar Daddy. He is in a business similar to a contractor, where he builds something for a client; when that project is done, he should have the next project waiting in the wings. He knows this, and he listens to friends who recommend what he should do, but he doesn't do it.

Granted, he is very busy. But so is the self-funded entrepreneur. Anyone who is running a business is flat-out busy all the time. He just hasn't made it a priority to take the steps he needs to take, because he knows he can depend on Sugar Daddy's money after he finishes the current project he's working on. He intends to focus on marketing and selling after this project is finished.

The problem is, he is selling a high-scrutiny, expensive product. The sales cycle takes months. If he wanted to make sure that he had no gap at all between the current project and the next project, he would have secured the next project months ago. The project-specific employees working for him now could just move from the earlier project to the newer one. He would retain his current team.

Running a business is a test of character. Character comes from leaving your comfort zone and doing whatever has to be done to keep the business going. The self-funded entrepreneur could have procrastinated about the documentation. He could have rationalized about the salespeople. But he didn't. He is like a hungry tiger on the prowl, looking for new ways to make customers happy. His teeth are sharp and gleaming. No rot there. He sees an opportunity. He sees the wisdom of going in a particular direction, and he goes.

You can procrastinate and rationalize without an investor, but you will not make it through the quiet periods. Having an investor fools you into thinking that you are making it, when in fact, you are not.

If you have an investor now, the sooner your business can stand on its own, the better. It will convert you from someone who always has an "out" to someone who absolutely, positively must succeed.

The resulting victories are more satisfying than you can imagine, and well worth the effort.