From idea to business - or go with the flow

Part 1. Idea

Each of us has a few ideas in stock. Every time you encounter a problem, you have an idea how to solve this problem once and for all. If an idea passes the selection in mind for utility, embodiment and growth, it is recorded in one note, evernote or any notepad. And there it is waiting in the wings, until there is time for it.
Then you meet a friend who enthusiastically tells you about his new brilliant idea. After listening, you come to the fact that she terribly reminds you of one of yours. You modify it a bit and offer your own version. He is delighted, and you begin to sketch a business plan and draw prototypes. Over time, you notice more and more problems and difficulties in implementing, attracting users and in general the need for 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 focused on a specific goal, the brain begins to catch information directly from the ether. A conversation 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 very place where you need to go if you decide to take the next step.

We bought tickets for the next startup weekend. We are preparing our “pitch” - a short speech, during which we need to tell about our idea, about the problem that it solves and the concept of business. During the weekend you meet new people. Communicate, someone shared their immediate problem. Surprised that there is no service that would solve it. Shrug, really why not. Impromptu there is 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 vote - and your idea gets the required number of votes. The first test for lice is passed. You also have a team, and even some. The complete set is 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.
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Part 3. Working excitement

Mad rhythm, over the weekend, you need to prepare a presentation, a working prototype and dial the subscribers base. Why already followers? 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 slow down and start thinking about implementation. In reality, the idea must first be sold. Because, in the initial version, the idea never lives to be realized. It must “mutate” along with the desires of the target audience. Here the mentors should try to set 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 must be taken very seriously and professionally. Here is a well-stated speech. Entrust this business to sales people, not all geeks are good at presenting their thoughts. Add a little humor, flirt with the audience and know how to answer tricky questions.

If you have free developers in 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 rating. Except for a few moments, the experts really like your idea. You are praised and perhaps you will have some kind of media support. What happens after that - you are only with yourself. At this stage, talking about some kind of financial support is too early. The first time 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" with time for good. The lack of the necessary skills for the development of the first release, but the greatest 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 have one working week per startup at best.
There is a question of priorities, and very often a startup does not find its place in the list of priorities. Here, 90% of all startups and dies, never reaching maturity.

Part 5. The search for angels

Maybe at the beginning you wanted to release your first product on your own. But at some point you realize that without investing, your idea can remain an idea like that forever. And parting with some part of the future business may not be such a bad alternative, compared to the absence of this business in general.

Finding the right investor can be very difficult. In an amicable way, you should offer him a solution to the problem, about which he himself was already thinking. He will look at your team, your business plan and how you will solve the problem. With investors, this is the same as with a resume when you first start looking for work. If out of 100 sent letters, you will be answered with 10 and invited for an interview 5, I consider this a success. Spamming is also not necessary, it would be good to see in which projects a particular angel is investing. The presence of connections in this matter simplifies the process at times.

Unfortunately, in a foreign country with a lack of connections, it is difficult to reach an agreement with investors. And here crowdfunding comes to the rescue. More precisely its other form - crowdinvesting. Crowdinvesting, pursuing the same goal to receive funds from numerous backers, in return offers not 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 the development, as well as the opportunity to tell about the company to a larger audience. For investors, this is not only an opportunity to help your favorite idea, but also to receive substantial returns on investments, with the success of the company.

The idea of ​​crowdinvesting is that it’s probably easier to get 200 euros from 100 people than 20 000 from one. However, crowdinvesting 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 crowdinvestment campaign is not very different from the more familiar crowdfunding. 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 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 company valuation is the minimum. Add to this the analysis of competitors, as well as financial forecasts and you are already a bit ahead of the rest. To arrange all this of course, you need 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 bury themselves in a pile of documents.

The site is desirable to choose the one where your potential customers live. We chose fundedbyme.com because it is local, it has a friendly and simple interface and it has good results in raising money in the markets that interest us. Since we started talking about stocks, you need not to forget that for this you need to register the type of company that has the right to issue shares. Most often on such sites offer from 5 to 20% of the company. To estimate these percentages in monetary terms, you need to make an estimate of 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 comes promotion, development, first release, user growth and access to monetization. All this is worth a separate article, and I hope about these stages we can also tell from our personal experience.