Anthony Pisapia

Are you rich?
This isn’t a philosophical question, it’s about money.  Are you rich?  I only ask because being rich changes the type of business you can start.

If you’re rich you can start a business without customers, or a nonprofit without donors. You can venture out with an idea only, get started, and find your way.  You can take time to find your customers/donors and, if you’re rich enough, never find any customers/donors at all and still continue on.

By the way, it doesn’t have to be your money.  It can be a foundation’s money, a philanthropist’s money, a VC’s money, your parent’s money, the company you work for (their money).  The money can come from anywhere, but having alot of it changes the type of company you can start.

If you’re rich, get started:
Some people start a nonprofit with only an idea, a social ill they want to find a cure for.  ”I see homeless people in the street, I want to feed them”.  Do you have donors?  ”No”?  Do you have money?  Okay, get started.

Some people start businesses to solve problems that are bugging them.  ”I can’t find a tennis racket store, I’m going to open a tennis racket store in center city”.  Will you have customers?  ”Not sure”.  Do you have money?  Okay, get started.

The pursuit of that idea starts the clock ticking. The amount of money you have on hand divided by your monthly burn rate determines how many months you have to get customers or die.  Be they donors or tennis players, you must find them in time.  If you’re rich it doesn’t matter, at least not until you run out of money.

If you’re rich, but not rich enough:
If you are rich, there’s an important question to ask: “can my business sustain itself on my capital alone”?  If not, start as if you have no money.  Your company’s existence is a myth until you find profitable customers. Besides, acting like you don’t have money breeds the right habits. It’s the best of both worlds and my favorite way to start a company, it’s just not always possible.

If you’re not rich:
If you are not rich, start as if you have no money.  It won’t be hard. We’ll assume you have no capital and are in need of it. That’s a fine point to start at, don’t worry. There are two ways to get money if you’re a for-profit and one way if you’re a nonprofit.*

On to step two.

*: 1)customers/donors (bootstrapping) 2)investors (selling equity).