months deferred payment terms Visas – Added cost & 3me, make sure it’s worth it Market Research – invested $2k in a US census relevant survey of over 800 people with 10+ targeted ques3ons – did one on one user surveys hNp://www.gmi-‐mr.com/ Ini3al Capital – startup capital was $35k, 1/3 of this went to lawyers (before we had proven anything) and 1/4 to consultants that got us good market intel – overspent on legal 3
many reasons, quora and Venture Hacks are your friends here. Should bring new ideas into the mix, start with a project first that is in the domain, keep cash and equity separate, put in place ves3ng for earned equity. Start as equals, or you’re not co-‐founders. hNp://www.quora.com/Technical-‐Co-‐founders hNp://venturehacks.com/ hNp://venturehacks.com/bookstore Prototyping – start with wireframe tools like Balsamiq, create low fidelity, highly interac3ve mockups and step through these with a broad range of people including those you might have invest in the future (mine included 2 of the 3 who would later invest). Let them get invested in your product evolu3on. Listen. www.Balsamiq.com 4
3 rules of good names (hard to read, when you see it you aren’t sure how to say it, when you hear it, you’re not sure how to spell it)… it had to go. Don’t get stuck on your name, be pragma3c How much difference does it make… huge. Mint vs wesabe example, well documented on quora.. Be prepared to work on gecng a good name.. We spent months on it. It paid off. hNp://www.quora.com/Why-‐did-‐Wesabe-‐shut-‐down-‐while-‐Mint-‐did-‐so-‐well hNp://blog.precipice.org/why-‐wesabe-‐lost-‐to-‐mint Brand: Pay top dollar to create your core brand, give them something to work with (a good name and a clear vision of what you stand for) .. Create something interes3ng in your brand story … the green is sampled from your US money as an example … We spent almost 1/3 of our startup capital building our core brand and blog and UI concepts.. Allowing us to sell the vision to everyone in a far more effec3ve way 5
to be prepared for this, but here is what happened.. Losing co-‐founder forced me offshore to get beta dev done, .. Only way to achieve result in 3meframes is to be onsite.. In any offshore place this will probably save you money.. 7 weeks.. On $10EUR a day … leh huge hole in Specify down to the leNer… reduce scope & complexity, focus on the core parts of the proposi3on and who you are building for? Use Atlassian OnDemand-‐ hNp://www.atlassian.com/sohware/ondemand/overview $20/month for up to 10 people for wiki & issue tracking … no brainer Ran out of money – external funding cri3cal to keeping the business afloat – price aggressively, .. Win on emo3on, focus on < 5 people who have been part of the product evolu3on .. Underwrite their risk en3rely Milestones… make em 3ght, singular and in sequence (not parallel) .. Put 100% of effort into hicng each milestone 6
version of your product to real people to see a) If they actually like it / use it / get value out of it b) Establish the extent to which your users will generate more users for you c) Further refine your product experience Trac3on – the key to funding.. Or is it? … Once you have enough to do a beta… put all your energy into making this happen. Prototyping proves very liNle in the eyes of arms length investors hNp://www.quora.com/Brendan-‐Baker/Startups-‐How-‐to-‐Communicate-‐Trac3on-‐to-‐Investors Publicity is key to a successful beta, defined as gecng enough people in the front door to get meaningful informa3on and/or kickstart users. Sprouter.com Startupreport.com 7
finishing up with moderate and expensive growth… we had started re-‐ developing the en3re back end in parallel and were inves3ng no further in the beta code (it was to be trashed) I was able to point to finovate, press, beta, team .. So gecng into events was easy… however, pitch events are like trying to find a girlfriend by entering a male beauty pageant There is virtually no 3me to make any real connec3on … even the most amazing presenta3ons very rarely go on to get funding.. I started to see a lot of the same faces at these events … you can get value out of them.. Go early, wear your team colours … meet as many people as possible… try to connect with at least 2 people on the panel.. They will be from VC who might fund you later.. I’m s3ll in monthly update conversa3ons with 4 people I met via pitch events who were on panels.. Once we make enough progress.. Those contacts will come in handy hNp://jumpstartdays.com/ 8
same 3me.. Is incredibly hard, don’t do it. If your beta can’t get you funded … get to launch first…then come back to it Try to learn why you didn’t get funding.. Ask hard ques3ons, don’t worry about scaring people off.. If they’ve not commiNed aher 1 month then they are unlikely to commit, so nothing to lose by understanding what isnt working Your reasons will be different but get in the habit of asking why why why – find the root cause of their disinterest in inves3ng.. Go back to your roots – find people who knew you in a former life, who you have had some, any success with, even if that was also associated with some failure. Qualify that they trust you, and focus on the market you’re playing in … in short, find people from the industry who you’ve worked with and s3ll have a rela3onship with. Come in at your ini3al terms but focus on gecng a leader (not a lemming) agreed to discounted terms – remember to appeal to their ability to help you over and above the money alone. This resonates with people who are 9
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