Why do some entrepreneurs treat fundraising as the ultimate goal? How can first principles thinking help them avoid this pitfall?

Let's put it this way: you can imagine entrepreneurship as a road trip, with your goal being to drive to a beautiful destination.

Why do some entrepreneurs treat fundraising as the goal?

Because on a road trip, the car needs fuel. Fundraising is like going to a gas station to refuel.

Some drivers, as they drive, forget where they're going. They might think:

1. Refueling itself is prestigious: Every time a large sum of money is raised, it gets media coverage, friends give likes, and they feel incredibly successful, as if they've reached the "pinnacle of life." This is much more glamorous than quietly driving and serving customers. It's like someone boasting about how many gas stations they've visited and how many liters of 98-octane fuel they've pumped, instead of talking about the beautiful scenery they've seen.
2. Running out of fuel, panic: The company's cash reserves are running low; salaries can't be paid, and rent is due. At this point, the only thought is "finding money," and fundraising becomes the sole goal for survival. All their energy is focused on how to convince the gas station owner to give them fuel, rather than considering if the route is correct or if there are problems with the car.
3. Treating refueling as a milestone: The entire environment talks about "Series A," "Series B," "Series C," as if entrepreneurship is a game of clearing levels, and raising the next round means passing a stage. Everyone is competing to see who can reach the next gas station faster, rather than who is closer to the ultimate destination.

In essence, they mistake the "process" and "tool" (refueling) for the "destination" (the goal).

How does First Principles thinking avoid this pitfall?

First Principles thinking is like a GPS navigator; it constantly reminds you: "Your destination is the stars and the sea, not the next gas station."

It allows you to cast aside external noise like "everyone else is fundraising" or "raising capital means success," and instead ponder a few fundamental, stark questions:

1. What is the ultimate destination of this journey?

   • What is the essence of a business? It's not the amount of funding raised, nor the company's size, but creating value for customers and thereby generating sustainable revenue. In plain terms, what you make must be something people are willing to pay for, and continue to pay for. This is the "destination" of your entrepreneurial journey.

2. Do I really need to refuel right now?

   • When you consider this question, you'll realize that money is just a tool, an "accelerator." You should ask yourself: What specific things do I need this money for? Is it to hire more engineers to develop a much-needed feature for customers? Or to invest in marketing to let more people know about my great product?
   • If your product isn't wanted, and you're heading in the wrong direction, then the more funding (fuel) you raise, the further you'll drive down the wrong path, and the faster you'll fail.

3. Are there other ways to reach my destination besides refueling?

   • Do I absolutely need to raise a large sum of money to get things done? Can I first create a simple product, serve a small group of customers, earn some money (a self-contained fuel tank) to prove my route is correct, and then consider "big refueling" (fundraising) to go faster?

Therefore, First Principles thinking pulls you out of the anxiety of "how to get money" and makes you focus on the core question of "how to create irreplaceable value for customers."

Once you've thoroughly thought through the fundamental question of "creating value," fundraising naturally returns to its essence: it's merely a tool you choose to use on the right path to reach your destination faster, nothing more, nothing less. Your goal will always be the distant scenery, not the gas station by the roadside.