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First, if you are going to embrace the 'agile'/lean startup approach, you need to cozy up the idea of vaporware. Sell it first, then build it. Setting the pro

by trussi 15y ago

First, if you are going to embrace the 'agile'/lean startup approach, you need to cozy up the idea of vaporware. Sell it first, then build it. Setting the proper expectations is critical. But this is the single best approach for a bootstrapped company. Having one sale of one dollar is a huge milestone and makes your position way stronger when talking to investors. Here's a good video on the subject: http://vimeo.com/15894299 http://vimeo.com/15894299 Second, do yourself and your potential investors a huge favor. Build whatever prototype you think you need for the investor presentation. Then go and give the same demo to 20 potential users first. Then refine your demo and present it to investors. The insight you'll receive from the customer demo is invaluable! Here's another good video on this: http://vimeo.com/16200157 http://vimeo.com/16200157 Third (and most controversial), don't waste your time with investors until you have a built product and paying customers. Seriously. Finding investors takes A LOT of time. And you'll have to give away your company to get investment at this stage. The general rule is to wait as long as possible before taking investment because (theoretically) your company will improve its position with time and the cost of the investment capital will go down. Find some friends and family money (< $50k). Build a product. Sell the product to 10 people. Then entertain the investor route. If you can build a product and sell a product with <$50 investment, you will be in an exponentially better place than you are right now. Good luck and keep us posted.

BadassFractal 15y ago
Those are both very interesting links, thanks for sharing, I feel like I learned a lot from them. In addition I liked the following link I stumbled upon as it confirmed in large part my suspicions: http://www.artificialignorance.net/blog/startup/the-startup-meme-phase-1-the-prototype/ http://www.artificialignorance.net/blog/startup/the-startup-... I'm not familiar with how a lean startup is supposed to handle the alpha stage and so I'll need to read up on that. Regarding bootstrapping, I think our issue was to try to get some funding asap so we can start working on the project full time. We have very few engineering resources as the best hackers are already hard at work at their full time jobs and with funding we could be able to dedicate all of our attention to the project. My opinion has always been that you need to prove that whatever you're doing is doable, confirm the hypothesis that someone would want to use it, before you go to people and ask for money. We might not have the luxury to be able to wait that long, but perhaps there's simply no other option and therefore it might take years before we can leave our full times :) Something else I haven't found so far were examples of alpha demos that these now famous startups did back in the day. I've seen collections of demos for TechCrunch and other venues, where for example DropBox already had thousands of users and 10 developers on the team, but that's way past the stage I'm more interested in. I'd love to see, for example, what DropBox looked like when they just had a prototype.
- jjhageman 15y ago
  Reiterating the already made comments above, here is what investors typically value most from greatest to least: 1. Fully functional MVP with paying/profit-inducing users 2. Partial MVP with paying/profit-inducing users 3. Full or partial MVP with real users 4. Full or partial MVP with beta users 5. Full or partial MVP (the real product) with no users 6. Interactive prototype 7. Wireframes and mockups 8. Powerpoint slides The closer you can get to the top of the list, in general the more motivated an investor will be. Of course, this is real life and you can't just jump to position 1 or 2. For this reason, if you are only at a position 6 to 8, it is often better to focus on pitching technical cofounders first, getting to at least position 5 or higher, and then pitching investors.

by trussi 15y ago

BadassFractal 15y ago

Those are both very interesting links, thanks for sharing, I feel like I learned a lot from them. In addition I liked the following link I stumbled upon as it confirmed in large part my suspicions: http://www.artificialignorance.net/blog/startup/the-startup-meme-phase-1-the-prototype/ http://www.artificialignorance.net/blog/startup/the-startup-... I'm not familiar with how a lean startup is supposed to handle the alpha stage and so I'll need to read up on that. Regarding bootstrapping, I think our issue was to try to get some funding asap so we can start working on the project full time. We have very few engineering resources as the best hackers are already hard at work at their full time jobs and with funding we could be able to dedicate all of our attention to the project. My opinion has always been that you need to prove that whatever you're doing is doable, confirm the hypothesis that someone would want to use it, before you go to people and ask for money. We might not have the luxury to be able to wait that long, but perhaps there's simply no other option and therefore it might take years before we can leave our full times :) Something else I haven't found so far were examples of alpha demos that these now famous startups did back in the day. I've seen collections of demos for TechCrunch and other venues, where for example DropBox already had thousands of users and 10 developers on the team, but that's way past the stage I'm more interested in. I'd love to see, for example, what DropBox looked like when they just had a prototype.

jjhageman 15y ago
Reiterating the already made comments above, here is what investors typically value most from greatest to least: 1. Fully functional MVP with paying/profit-inducing users 2. Partial MVP with paying/profit-inducing users 3. Full or partial MVP with real users 4. Full or partial MVP with beta users 5. Full or partial MVP (the real product) with no users 6. Interactive prototype 7. Wireframes and mockups 8. Powerpoint slides The closer you can get to the top of the list, in general the more motivated an investor will be. Of course, this is real life and you can't just jump to position 1 or 2. For this reason, if you are only at a position 6 to 8, it is often better to focus on pitching technical cofounders first, getting to at least position 5 or higher, and then pitching investors.