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Entrepreneurs’ are a passionate lot. They fall hopelessly, sometimes blindly, in love with their ideas. It’s that passion that consumes their every thought and drives them to figure out how to turn their ideas into real products and services. I know this because I count myself among their ranks. The really good entrepreneurs can seduce everyone around them into believing that fame and riches are sure to follow. Aunt Bea becomes an investor. Old college buddy, Gary, signs on as a cofounder. It’s usually at that point that an idea becomes a business. I know this too. Aunt Bea died disgusted with her favorite nephew and Gary rarely speaks to me anymore.

All around the world, but particularly in the United States, the same scene unfolds several million times each year:

1) Light bulb goes on.
That’s a great idea!

2) Name it.
That gives it a personality, which in turn bestows life upon it.

3) Incorporate.
That makes it official.

4) Write a business summary.
That describes the idea in detail to people who can be helpful.

5) Raise some money.
That pays the mortgage until the riches come.

6) Develop the product.
That proves you are not just another dreamer.

7) Encounter distractions and unrealized expectations.
That’s where most of those millions of promising startups go awry.

Here’s where I shall insert the subliminal messages that all startups must heed.

There is so much to think about [get a customer] and so much to do [validate, validate, validate], founders busy themselves with everything except [testimonials] the most important thing that needs to be done: Sign up paying customers. [Sign up paying customers].

This is so obvious, but so often overlooked by entrepreneurs, that by the time they figure it out it is often too late. I know this from experience. It is only after they have burned through all of Aunt Bea’s money and buddy Gary’s patience that they seek divine intervention. Otherwise known as, The VC. After an energetic and impassioned presentation by the entrepreneur, which fails to stir The VC in the least, He speaks.

"Who is eating the dog food?"

To which the entrepreneur sheepishly replies, "Huh?" At least that was my reply.

"The customers!" The VC yells. "Who is using the product?!"

"Well, uh, no one yet. We’re about ready to go into beta testing."

"Fine. Come back and see me when someone noteworthy is using it. You gotta have a lead dog if you’re gonna hunt!"

It took me awhile, but I finally understood both messages. First, there is nothing more important than having a customer testify to the benefits of the product or service, i.e., "eating the dog food." Second, before you go out to raise money, i.e., "hunt," you’re likely to get skunked unless you have a lead dog, preferably, a pack of dogs. To this day, whenever I hear an investor say, "No one is eating the dog food," or "That dog don’t hunt," I know the deal is going no where.

The single most important thing a startup company can do is to validate the business opportunity by having referenceable accounts. It is the thing that will attract investors. More importantly, it is the thing that will attract even more customers. All pack dogs want to eat what the lead dog is eating. Startups need to launch with a few lead dogs.

All the other things that startups think they need to do are nothing but cleverly disguised distractions. Get a customer that has some brand power – which other people in the space know and respect. Ask them to be a reference. Validate the business. This should be done at the exclusion of everything else, including the tendency to spend more time and money to improve the product. Feature creep is a never-ending battle. The product can always be made better. You can’t do everything at once. Sooner or later somebody has got to buy something.