In 2021, U.S. startups raised a record-level $330 billion in funding, almost doubling the $167 billion raised in 2020. While over-funding can accelerate innovation temporarily, it can also lead to a flywheel of dilution and an over-reliance on funding rather than cash flows. Given the current slow-down, it's important to reiterate something our team has been saying for years: Funding is a means, not an end. Here's what to obsess over instead. 

Obsessively plan your way to product-market fit. 

When starting a company, your schedule is an open ocean and if you're not front-loading planning, you will waste time. With the vast majority of startups failing, the best odds of survival go to founders who obsessively focus on achieving product-market fit before anything else. The best measure of that is customers voting for your company with their wallet or time. But what do you need to do to get there?

The answer is different for every company, but the one commonality is that founders don't stand a chance if they aren't obsessively identifying the gaps between where they are now and what they need to reach product-market fit. At Wilbur Labs, we start several companies every year and see this firsthand. We have learned that starting with a clear problem and working backwards to solve it is the best path to product-market fit.

For Phase One, we identify the simplest possible solution by speaking with real customers and industry experts. Then we work backwards by identifying all the work streams needed to get there. We spend a lot of time on this stage, being as specific as possible so we have a very clear assessment for all the pieces needed to reach a Phase One that solves a real customer problem.

After identifying the gaps, we focus on execution. However, there is no such thing as a perfect plan. We continue to revisit the path to product-market fit and make necessary adjustments to ensure we are focused on the most important things.

Obsess over finding great people.  

Once fundraising-hungry founders reach product-market fit, they tend to set their eyes on one prize: a Series A. While you may seek funding at this stage, instead of racing to raise more cash, let it first be a cue to obsess over people and hiring. The key is to fire yourself from as many jobs as possible and to build a world-class team. Recruiting top candidates is a full-time job and should take up a substantial amount of your time, if not the majority. 

Here's the reality: The best people aren't necessarily looking for jobs -- 70 percent of the global workforce has been estimated to be passive (not active) candidates and are currently employed. Posting a job online and waiting for inbound candidates won't attract the best of the best. 

When looking for great people, allocate your effort to the best sources. First, ask any advisors, consultants, mentors, or partners for referrals since they know your business and are often outstanding candidates themselves. 

Second, explore networks like your past employers (assuming you left gracefully), your alma mater, or any related groups you belong to. Outside of referrals and your networks, targeted searches on LinkedIn are your best bet.

A fundraising round cannot compensate for a lack of talent. Your scarce time and attention are better spent on recruiting. 

Obsess over a path to profitability.

Serial fundraising isn't a substitute for driving revenue and profits. 

If customers aren't voting with their wallet or their time, at healthy unit economics, funding isn't a cure. All founders walk the difficult tightrope of balancing growth and profitability, but a clear path to positive cash flow should always be the end game.  

Yes, some companies in hardware, automotive, and industrial innovation often have massive capital requirements and can't initially generate revenue without investors. And yes, some companies rightfully prioritize user growth and worry about monetization later, so they need funding in the meantime. Even so, the best of these businesses diligently aim to (eventually) become profitable and stand on their own two feet. 

Instead of obsessing over the next funding round, focus on the path to profitability. Then, fundraising will be an option, not a lifeline.

Reprioritize.

Your time is finite and there is nothing more powerful than clear priorities. Obsess over product-market fit, people, and profitability -- not fundraising. Although funding is a fuel source for incredible companies, it's no measure or guarantor of success.