This morning, I received an article in my inbox by Rubén D. about the Startup Founder’s Guide to Financial Modeling. Ask several startup advisors or seasoned entrepreneurs about a founder’s primary responsibility they might agree with how Rubén begins his article: “As a founder, your primary responsibility is clear: make sure your company doesn’t run out of cash.” It sounds straightforward, almost indisputable. After all, cash flow is critical for any business, and without it, doors close, salaries stop, and dreams evaporate.
But this narrow focus misses the bigger picture. Cash is a result. It’s an output of decisions made and actions taken. A founder’s role, at its core, is not just to keep the lights on. It’s to understand, serve, and connect with the most critical component of any business: the customer. Without customers, there’s no revenue, no cash flow, and, ultimately, no business.
Customers, Not Cash, Are the True Lifeline
A business cannot operate without customers. Every transaction, every repeat order, and every referral stems from the trust and loyalty you earn from them. A company could technically exist without cash. A scrappy, bootstrapped startup might barter, trade services, or rely on sweat equity and goodwill. But no business can sustain itself without people willing to pay for what it offers. Customers are the lifeblood.
Consider this: Startups don’t fail because they run out of cash. They fail because they run out of reasons for people to give them money. Running out of cash is the symptom, not the ailment. The disease is misalignment with the market. And that’s where the founder’s focus should lie: understanding their customers deeply enough to build something people want and need.
Customer Understanding Fuels Product-Market Fit
If you know your customers, you’ll find product-market fit. If you align your vision with their needs, you’ll build something that solves a problem, satisfies a desire, or meets a need so clearly that it becomes indispensable. Product-market fit isn’t just a milestone; it’s the foundation of every successful company. Achieving this requires relentless curiosity and empathy for your customers.
Failing to achieve this alignment leads to a dangerous cycle: spending money without direction. You can pour millions into marketing, distribution, or operations, but those dollars become a bonfire without knowing who you serve and why they care. On the flip side, companies that deeply understand their customers can bootstrap their way to success, generating the kind of customer loyalty that attracts revenue and investors.
Take Airbnb, for example. In its early days, the company faced plenty of financial struggles. The founders sold cereal boxes to scrape by. But what kept them afloat wasn’t just the cash from those cereal sales but their relentless focus on understanding their customers. They interviewed hosts, visited homes, and obsessed over creating a platform that solved real problems for real people. That obsession led to product-market fit, which in turn attracted both customers and investors.
Cash Flow Is a Byproduct of Serving the Customer
Yes, cash flow matters. No business can operate indefinitely without money. But the fixation on cash as the ultimate goal is misguided. Cash flow is the result of serving customers effectively. When customers believe in your product, they buy. When they buy, revenue flows. When revenue flows, you have cash to pay employees, invest in growth, and weather the inevitable storms of business.
But when founders focus on cash flow at customers’ expense, they make short-sighted decisions. They might cut corners on quality to save a few bucks, alienating the people they’re trying to serve. Or they might chase revenue from anyone and everyone, diluting their brand and losing focus on their core market. These tactics might boost short-term cash flow but rarely lead to sustainable success.
The founders who succeed put customers at the center of every decision. They don’t just ask, How can we make money? They ask, How can we create value for our customers? They understand that cash follows value, not the other way around.
From Bootstrapping to Venture Capital: It’s Still About the Customer
The emphasis on cash flow often comes from the startup world, where founders are told to focus on their “runway,” the number of months they can operate before running out of cash. It’s a practical concern, especially for venture-backed companies. But even in the high-stakes world of VC funding, the most successful founders understand that cash is just a means to an end. The end is building something people love.
Bootstrapped businesses often exemplify this principle. With little to no resources, these founders don’t have the luxury of burning through cash to find their footing. Instead, they focus on finding customers and delighting them. Those happy customers generate the revenue that attracts investors and creates a runway. The path is different, but the destination is the same: serving the customer.
Venture-backed startups face a similar reality. Investors don’t hand over millions of dollars because a founder has a great idea. They invest because they see potential for market fit, a product that serves a real need for a defined group of customers. And once that money is in the bank, investors expect it to deepen customer relationships, not just pad the runway.
When Companies Forget Their Customers, They Fail
History is littered with companies that lost sight of their customers and paid the price. Blockbuster didn’t fail because it ran out of cash; it failed because it ignored what customers wanted: convenience, digital access, and flexibility. Kodak didn’t collapse because it couldn’t manage its cash flow; it collapsed because it clung to film in a world moving toward digital photography. Bud Light lost an estimated $1.4 billion in sales simply because they didn’t align with their customers.
On the other hand, companies that prioritize their customers often succeed even in tough times. Amazon, for example, spent years operating at a loss while it built its customer base and refined its value proposition. Jeff Bezos famously said, “We’re not competitor-obsessed; we’re customer-obsessed.” That obsession has turned Amazon into one of the most valuable companies in the world.
The Customer Is Always First
The adage, “The customer is always right,” has roots in retail and service industries, but it’s not entirely accurate for founders. Customers aren’t always right. Sometimes, they don’t know what they want. Sometimes, they ask they’re for something you can’t or shouldn’t provide. But they are always first. They are the reason your business exists, the North Star that should guide your decisions.
Founders who put customers first don’t just build companies, they build movements. They create products that resonate, brands that inspire loyalty, and businesses that endure. They understand that cash flow is essential but not the end goal. The goal is to create something valuable for the people you serve. And when you do that, the cash will follow.
The Founder’s Framework: Customer First
As a founder, your primary responsibility is to serve your customers. Everything else, cash flow, strategy, and execution, flows from that central mission. When you put the customer first, you align your vision with their needs. You craft a plan that reflects their desires and challenges. You execute with a focus on delivering value. And yes, you manage cash flow as a means to an end, not as the end itself.
So, the next time someone tells you your job is to keep the company from running out of cash, consider a different perspective. Your job is to make sure your company never runs out of customers. Because customers are your business’s real lifeline, they always come first.
To learn more about building customer-centric organizations or improving your customer experience, please contact me at chrishood.com/contact.