From idea to business - or go with the flow
Part 1. Idea
Each of us has several ideas in stock. Each time you encounter a problem, you have an idea how to solve this problem once and for all. If an idea is selected in the mind for usefulness, incarnation and growth, it is written in one note, evernote or any notebook. And there she waits in the wings until she finds the time.
Then you meet a friend who enthusiastically talks to you about his new brilliant idea. After listening, you come to the fact that it terribly reminds you of one of yours. You modify it a little, and offer your own version. He is delighted, and you begin to sketch out a business plan and draw prototypes. Over time, you notice more and more problems and difficulties in implementing, attracting users and generally needing it. In the end, it turns out that competitors have a similar service that already solves this problem. The idea goes back to the shelf, until better times.
Part 2. Eureka
People say that any startup starts with an idea. I will say that a startup starts with the right environment. Being in an environment where everyone is open and ready to share thoughts, where everyone is aimed at a specific goal, the brain begins to catch information right from the air. Talking about life, completely unrelated to business, can give you an idea for a business that you even thought about. For this very reason, hackathons and various startup weekends are the place where you need to go if you decide on the next step.
We bought tickets for the next startup weekend. Preparing your “pitch” - a short presentation, during which you need to talk about your idea, about the problem that it solves and the concept of business. During the weekend you meet new people. Communicate, someone shared his urgent problem. You are surprised that there is no service that would solve it. Shrugged, really why not. Impromptu there was a new speech for the pitch. There are only 60 seconds, you need to be able to talk about the idea in order to interest the audience and find a team. Then the vote - and your idea gets the required number of votes. First lice test passed. You also got a team, and what kind. A complete set - two developers, a designer and a marketer. Now you need to prepare a prototype and presentation by the end of the weekend for consideration by the jury.
Part 3. Working excitement
Crazy rhythm, over the weekend you need to prepare a presentation, a working prototype and gain a subscriber base. Why are there already subscribers? For the simple reason that the idea needs to be tested on users. Do they agree that there is such a problem? Or that your service solves it. Unfortunately, many here are slowing down and starting to think about implementation. In reality, the idea must first be sold. Because in the initial version, the idea never survives to implementation. She must “mutate” along with the desires of the target audience. Here, mentors should try to guide the team on the right path.
In second place in importance is the presentation. Beautiful slide shows, videos, graphics. This is what the jury will see, this is what potential users and investors will see. This should be taken very seriously and professionally. There comes a well-posed speech. Entrust this business to salespeople; not all geeks express their thoughts well. Add some humor, flirt with the audience and know how to answer tricky questions.
If you have free developers on the team, they can be assigned to develop a prototype. Although often a beautiful landing page on a decent domain will bring more benefits in such a short time.
Part 4. Death Valley
You managed to get a good jury score. Except for a few points, experts really like your idea. You are praised and perhaps you will have some kind of media support. What happens after that - you only remain with yourself. At this stage, talking about some kind of financial support is too early. At first, you meet with the team every couple of days or on weekends. Over time, this happens less frequently. Some members of the team "fall off" over time for good. It affects the lack of the necessary skills to develop the first release, but the biggest enemy of any startup is the lack of time. Having a full-time job, even if you can work on weekends - in a month you will only get one working week for a startup at best.
The question of priorities arises, and very often a start-up does not find its place in the list of priorities. Here, 90% of all start-ups die and fail to reach maturity.
Part 5. Search for angels
Maybe in the beginning you wanted to release your first product on your own. But at some point you realize that without investing, your idea can forever remain an idea. And parting with some part of the future business may not be such a bad alternative, compared to the absence of this business at all.
Finding the right investor can be very difficult. In a good way, you should offer him a solution to a problem that he already thought about. He will look at your team, at your business plan and at how you will solve the problem. With investors, this is the same as with resumes when you are just starting to look for work. If out of 100 letters sent, you will be answered with 10 and invited for an interview 5, I consider it a success. Spamming is also not necessary, it would be nice to see which projects a particular angel invests in. The presence of ties in this matter simplifies the process at times.
Unfortunately, in a foreign country with a lack of connections, it is difficult to agree with investors. And here crowdfunding comes to the rescue. More precisely, its other form is crowdinvesting. Crowdinvesting, pursuing the same goal of obtaining funds from numerous backers, in return does not offer a specific product or service, but part of the company in the form of shares. For the creators of the company, this is a great opportunity to raise the necessary funds for development, as well as the opportunity to tell a larger audience about the company. For investors, this is not only an opportunity to help the idea you like, but also to receive solid return on investment, with the success of the company.
The idea of crowdinvesting is that getting 200 euros from 100 people is probably easier than 20,000 from one. However, crowdfunding platforms have become favorite places for large angels. With the ability to see several projects at the same time, as well as having all the necessary information on your monitor, it has become much easier to find candidates for investment.
Part 6. Platform
The crowdfunding campaign is not much different from the more familiar crowdfunding campaign. You need to think about a good video that reveals the potential of a product or service. Good description and colorful illustrations. A good plan and a step-by-step description of the project is a huge plus. The main difference is that you also need to submit documents of interest to investors. A business plan as well as an assessment of the value of the company is a minimum. Add to this the analysis of competitors, as well as financial forecasts, and you are already a little ahead of the rest. To make out all this of course, you need to be as friendly as possible. Among your potential investors there are people who are ready to lay out their 200 euros but do not want to dig into a pile of documents.
It is advisable to choose the site where your potential customers live. We chosefundedbyme.com because it is local, it has a friendly and simple interface and they have good results in raising money in the markets that interest us. Since we are talking about stocks, we must not forget that for this we need to register the type of company that has the right to issue shares. Most often, from 5 to 20% of companies offer such sites. To assess these percentages in cash, you need to properly evaluate the value of the entire company. Ideally, the money you want to attract should be enough to release the first version of a product or service.
Part 7. Final
This part is not final for a startup, but for this article. Next come promotion, development, first release, user growth and access to monetization. All this is worth a separate article, and I hope we can also tell about these stages from our personal experience.