The ancient Greek philosopher Zeno has a famous paradox about Achilles and the tortoise. Swift-footed Achilles can never catch the tortoise, because every time he reaches the spot where it was, the tortoise has crawled a little further. Mathematicians long ago explained why in the real world Achilles does catch the tortoise. But I know a place where Zeno's paradox works flawlessly. It is the startup that is looking for an investor in order to build an MVP, but cannot find an investor because it has no MVP. Every month it is a step closer to the goal, and every month the goal is a step further away. This can go on for years.
A closed loop
The pattern looks like this. A founder comes with an idea and a deck. The investor listens, nods and says: "Interesting, show me when you have a prototype." The founder leaves, improves the deck, adds a financial model, market research and competitor analysis, and goes to the next investor. That one says roughly the same thing. Six months later the founder has a superb deck, a polished speech and zero lines of code. A year later he sells the idea on slides like a virtuoso and still does not know whether a single living customer needs it.
I have seen this loop many times, and one thing always amazes me: the founder takes every investor's refusal as a signal to improve the deck. But it is a signal about something else entirely. The investor is not saying "your slides are bad". He is saying "I see no evidence". No slides count as evidence, however much you polish them.
You can sell an idea on slides forever. A project's value starts to grow only at the moment something appears that you can touch.
Why investors behave this way
Look at the situation through an investor's eyes and the behaviour is perfectly logical. They see dozens, sometimes hundreds of projects. Almost all of them have an idea, a deck and confidence. There are far more ideas in the world than people capable of executing them, so an idea on its own is worth very little. The risk of investing in a project with no product is enormous: nobody knows whether the team can build anything at all, and nobody knows whether anyone will want to use it. A working prototype removes the first risk, and the first users start removing the second. Every risk removed raises the value of the project and the share the founder can keep.
There is another important point. Looking for an investor without a product gives you feedback from investors, not from the market. These are different things. An investor may turn you down for reasons unrelated to the quality of the idea: not their industry, not the right size, no free capital. Or they may agree to an idea the market does not need. A founder who listens to investors instead of customers for years learns to sell the project to investors and unlearns how to listen to the people the project exists for.
The time that slips away
The most expensive thing in this loop is not even money, it is time. Every investor meeting means preparation, travel, the conversation, waiting for an answer, analysing the rejection. Counted honestly, a year of searching would have been enough to build a working first version more than once, find the first users and get real data. With that data the conversation with an investor would look completely different. Although by then perhaps no investor would be needed at all: many good companies grow to profitability on their first customers without selling any equity.
How to break the loop
The way out is almost always the same: build the first version without an investor. It sounds impossible until you start working out what a first version actually requires. Usually far less than the founder thinks.
- Narrow it down to one scenario. Not a platform, but a single user journey that solves one main problem. Everything else comes later.
- Do by hand what will later be automated. If you can deliver the value to your first customers manually, through spreadsheets, calls and email, that is already a test of demand without a single line of complex code.
- Sell before you build. A pre-order, a pilot, an agreement with a first customer on a discount in exchange for taking part in testing. A customer's money says more about the product than an investor's money.
- Use fast development methods. Today a first version can be assembled in days rather than months.
That last point is especially close to me. It is exactly what we do at Ingello: with Fractal the system is described, the generator produces the code, database, API and admin panel, and a working prototype of the main scenario appears within a few days. The budget for such a prototype is usually incomparably smaller than a year spent looking for money to fund development. I have often seen a founder with a prototype in hand cover in a month the distance that had previously taken a year. Not because he got better at talking, but because he no longer needed to talk. He shows.
What to do tomorrow
If you are currently looking for an investor to fund an MVP, ask yourself an honest question: how many meetings have I held in the last six months, and what have I learned about my customers in that time? If you have learned less about customers than about investors' tastes, pause the search for a month. Spend that month on the smallest working prototype and on conversations with your first users. Achilles catches the tortoise the moment he stops chasing it by Zeno's rules and simply takes a step longer than hers.
