I just found OnStartups and I'm looking forward to sharing
insights with you guys. My startup is currently in "concept" stage, and
I was wondering where to begin my journey. I have a great idea, created a few
business plans, and some mockups. Here's some questions I have:
1) Right now I am the only one on my team of course. I am not a programmer
or anything. I want to use a web company to do my graphic design,
programming, logo, etc. They're a great one stop shop and I met with them
for about an hour and a half recently. Although they are expensive, I want
to use them because I will not have to worry about someone quitting my team
or getting caught up with other things. What are the cons to this? Will
investors care? I will obviously hire programmers down the road.
2) What should I do in terms of funding? Right now I have some seed
investors that I want to consider and they said they fund concepts. Should I
try pitching this early?
3) Do I need a lawyer this early in the process If I want to speak to
investors? Do I need to trademark/patent anything?
TL;DR I have a new concept for a startup. I'm new and early in the process
so where should I begin? Thanks in advance for feedback!
Find 10 customers. Find 10 people willing to pay you money for your concept/idea, then it's probably a worthwhile project. Without this validation you've got no idea whether or not you're just throwing away money.
2.) If it was me I'd prefer to have something to pitch and have a prototype or some people using it as a proof of concept. Ideas can sound great on paper, there are tons of companies that build a product to solve the same problem, the success is in the implementation. That's the differentiation factor right there. How is your product better than competitors. If you need to pitch this early to get it off the ground, do whatever you have to do, but realize that if they want to invest, they'll be seeking a larger stake of equity for their increased risk of funding an idea.
3.) I don't think you need a lawyer until you get to the negotiation stage. Focus on your pitch, don't get ahead of yourself.
I've started down this road recently. I've:
1) built a mock up of the website in Keynote 2) been searching for a cofounder, although your approach may work as well (draw back is not having someone completely vested in the idea) how to find a technical cofounder may be of interest.
3) plans to build a prototype, get 10,000 users, and then take it to investors for potential funding (before 2000, investors would fund websites without prototypes because websites costed more to build... today investors, from what I've learned, are looking for prototypes, because websites are much cheaper to build.
4) I've researched patents, and come to the conclusion patents aren't worth the hassle, because technology changes so quickly (although it my be worth checking into)
5) Once I have a cofounder, I'm planning to build a small board of advisors (maybe two) to carry on an ongoing conversation about the product.
6) I wouldn't be too concerned about a lawyer now when talking to investors, but do learn about equity and percentages that are typical in series 'A' rounds of funding.
I also try to do something everyday on the idea, even if it is small.
I'd recommend reading 4 Steps to an Epiphany for suggestions about where to go from here. In short, it will tell you to meet with the type of people who will be your customer, verify that they will want your product, and get feedback to improve it.
Also, try to get a simple version of the product out early. Again, the idea is to get feedback from customers early.