Forget investors, early users are the real risk takers.
When it comes to early stage startups, apart from the team itself, investors involved in the project are commonly accepted as being the main risk takers.
Naturally, investing their time and money is a risk they are gambling on in return to potentially be part of the next big thing, and of course, in most cases, they have done this before, so they know what to look for when examining the risk vs. reward.
The thing is, there is another big risk taker at the beginning of a startups journey who is often overlooked, one which does not have the advantage of knowing what to look for in a successful startup or who has the benefit of potentially getting a big return on their investment:
The user.
So, what exactly does the user risk?
Their Time
This is what every user gives when using products. If you take a pivot or cease to exist, or even stop focusing on a particular feature, then the user has sunk costs in terms of their time.
A users time is a commodity whose value should not be underestimated especially when there are so many competing services fighting for exactly this.
By simply using your product they give you their time, and if things do not work out between you then this is something that they will never be able to get back.
Their Money
If you are charging for your service, then of course, the user will also have invested a little of their money in it.
By investing their money, they are really taking a chance on you, and believe that you are offering real value to them.
By paying you for your service they are expecting that you give them a worthwhile return on it.
Their Network
Often the way to a product getting traction is built-in virality and the success of the product relies on users inviting their friends to become users in order for them to get the most out of it.
This involves the user risking their network, as if they convince someone to change their existing service or habit in order to join them on this new service they are using and there are subsequently problems with it then their network will be a little less inclined to join them on future products they invite them to.
Their Data
The users are also trusting you with their data, and in light of recent revelations and accusations, users have to be incredibly careful with who their share their personal information with.
By agreeing to sign up to the service, they are demonstrating they trust that you will use their data in the correct way.
They then have to trust that you will protect their data at all costs no matter what the future holds for the product.
Early stage startups are understandably concerned that they must reward their investor(s) for taking the risk with them at the beginning of their journey, but they should not forget that they are also indebted to reward the biggest risk taker of all; their user.
I wrote this post as part of my I will write every day in 2014 challenge. You can subscribe to my future posts here, check out my blog here, and find me on Twitter here.
