I have a prototype, now what?


5

I've asked a few questions already on this site relating to what I should have in a business plan and how to focus on a prototype, preparing to approach investors.

OK, so I have a prototype, at least to the level where I can demonstrate my concept and the investor will be able to see how it will operate.

The thing is, I am unsure where to go from here. Most investors I look at, Angels and VC's only seem to want to invest in already established companies.

I don't have a company setup, as simply registering a company wouldnt make much of a difference, and I can't do much until I get funding.

I can't get funding from friends, coworkers or family, at all, simply due to circumstances.

How then can I find investors? How can I start making appointments to give a presentation and demonstrate my idea? Should I be advertising my idea somehow, without giving anything away?

Investors Prototype

asked Jun 28 '11 at 04:12
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Sonny Ordell
197 points
  • Is this a "launchable" proto-type? meaning, a website or web application you can simply 'launch' and try to get market traction or viral marketing before getting back to investors with an impressive funnel graph? – Ron M. 8 years ago
  • Why do you need investors at this point, how will the money be used, and what is preventing you from starting small and bootstrapping? – B Mitch 8 years ago
  • No, not at all. I can't develop a launchable prototype without an investment, this prototype simply demonstrates my concept so i can get investors interested. – Sonny Ordell 8 years ago
  • @B Mitch Because I have no savings at all. The money will be used to hire developers to finish developing a full product, something I am unable to do by my self. – Sonny Ordell 8 years ago
  • That may be a problem. Investors may want to see real user traction before they put their money. Being able to show something technically does not necessarily show market/business potential. I am doing the same thing - building a SaaS application that'll be launched on my own buck until I can get enough traction to interest investors. – Ron M. 8 years ago
  • @Sonny so you're not a developer? How about letting a friend be a co-founder with you, split the company around the middle in exchange for non paid dev work? – Ron M. 8 years ago
  • @ron M. I am a developer to an extent, but not do do the complicated kernel level stuff that my product needs. I have no friends who would be able to help moneywise or with contributing to development. – Sonny Ordell 8 years ago

2 Answers


4

You're right that investors like to have something solid: a product being used, a team with a track record, a problem that's widely acknowledged and poorly solved, a rock solid business model. Why? Well, it's very easy to spend money, much harder to make it.

So if you think your idea has merit, you should look at seeking investment as one project that will be ongoing perhaps for some time. And you should consider prioritising another project: building the team that will build the product.

Team members are also going to be investors, of their own time. So you still have a challenging pitching job. But you'll learn a lot, and it's easier getting time with people who are prospective cofounders, because they're trying to find or be found by the right project.

You have an idea, you have a prototype, and you have a barrier - the thought that you mustn't "give anything away." Sometimes that's a genuine issue, but almost all of the time it's just a barrier, and one you need to lower.

By pulling together a credible team, you make the project more investable. And you move forward towards the product and early users/customers. Which also, of course, makes the project more investable.

What's the worst that can happen? You might build a team but lose the idea (or find it changing radically) in the process. And that's good too (see above).

Good luck! You've already made progress, just keep moving it forward.

answered Jun 29 '11 at 01:23
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Jeremy Parsons
5,197 points

2

The number one thing investors are going to look for is traction. And the only way to get traction is by establishing product-market fit. It seems like you have the product.

Your next step is to find your market. Finding a market validates that your product is actually useful. If you can start getting your first customers on your own, that's an excellent sign that your prototype is actually commercially viable. As you said, investors are looking for "established" companies. You don't need to have millions of customers, but a handful of good ones is a great place to start.

Once you've gotten a few people to sign up and start using your app, you'll be in a much better place to start looking for investors, hiring employees, and figuring out exactly what kind of business you'll be able to generate from your app. (Note: an app is not necessarily a business)

But how do you start getting customers? Marketing.

I'll do a shameless plug here for a guide I'm working on called "Marketing for Hackers". It's written with developers in mind, and walks you through the process of conducting market research, finding potential customers, and growing a community around your product. It sounds like it might be helpful for you!

http://marketingforhackers.com/

answered Dec 14 '11 at 09:07
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Hartley Brody
1,317 points
  • I edited you answer because everybody can find the link in you profile. – Ross 8 years ago
  • @Ross - I think removing the link was a little harsh as its directly relevant to the question and answer and he fully disclosed relationship. See FAQ#Promotion - http://answers.onstartups.com/faq#promotionRyan 8 years ago

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