The biggest thing funding does to a B2C startup

Well, the biggest thing funding can do to a B2C startup is not just hiring talent or spending on customer acquisition, but on managing support.

Let’s just accept that customers are going to get frustrated – sometimes for valid reason, sometimes for totally random reason (almost on the lines of being unethical). What should you do? Refund or fight it out?

For instance, you order food from a food app and the order gets massively delayed (due to excess demand, traffic situation). You are frustrated and while there are valid reasons on both sides, what truly matters here is a seamless experience of refund (as seamless as ordering).

And the company needs to be massively funded to create a seamless experience, absorb this sort of cost.

And creating this experience becomes a huge leverage and differentiator (of course, you will be gamed by college kids with their numerous phone numbers, but that’s okay).

High growth companies often need to balance their acts – spend more time and effort on convincing the customer VS initiating refund, keep the customer happy, save a few negative social media mentions.

Keep the eye on LTV and not just that one last transaction.

Funding eases this and helps create a great experience. The flip side is to watch out for refunds becoming a habit to not improve the product or spend on convincing the customer.

But till then, if you wanna stay focused on growth, acquiring new customers and retaining the earlier ones, funding becomes a huge leverage.

If you are a bootstrapped company with no extra money to throw away to irate customers, you have a tough task of creating a 10x better and approachable support team, along with an experience that doesn’t fail too often.

And it’s hard. Bloody hard.

You can battle for great talent – but irate customers? They come in all illogical shapes and sizes and throwing that extra $$ might just help save you time and earn some peace of mind.