Prototype First, Build Later

You're an entrepreneur. You're out to build a strong, impactful product or service and you want to build a successful business around it. Whether you have a co-founder yet or not, you are definitely on the right path if building a team is on the top of your list. Building a team isn’t easy though, as you may have realized. A well-balanced team is one that complements each other’s expertise and skillsets, and is always aligned around the core product. How you bring about this alignment depends on how well you are able to bring this concept from your head to the table or the screen, considering how software startups are more popular today. 

A minimum viable product (MVP) or prototype is the manifestation of your product concept in the early stages. It is a crucial part of the Lean Startup tapproach, where you can build something that works and use it to get feedback from potential customers, investors and other stakeholders. Having a prototype also lends an air of credibility – it shows a potential cofounder that you are invested enough in your idea to go through the time and effort it takes to build something around it. 

Many non-technical entrepreneurs claim that the prototype stage is an obstacle, while it really shouldn’t be. Resources such as CodeAcademy can help you setup an HTML page with ease, while more mobile-oriented platforms such as Balsamiq and MarvelApp can help you build a mobile UI fairly quickly. You don’t need to spend much valuable time on a prototype, neither should app development companies make thousands of dollars off of building a product for which you don’t yet have a market.

Technical or not, one thing is for sure – you are better off investing your time and energy in business development and other efforts to grow the business, which means take the MVP acronym very literally. 

Minimum. Viable. Product.

It is the bare skeleton of your product with 2-3 working, scratchy features. 

• It should be easily deployed on any device, via a URL so you don’t waste resources on app store qualifications

• It should be low-cost, quick and powered by free web services and APIs instead of a complex backend

• It should be usable and look good, but doesn’t need the design work of a game studio

• It should allow you to make quick iterations so you can refine the product

Finally, and this does happen more than you think, you should be able to justify throwing it away and starting all over if that’s what your feedback suggests. 

Dan Bricklin, co-creator of VisiCalc and the owner of two successful iOS apps, talks about an HTML5 approach to prototyping on his blog:

“This is a great model to follow: Prototype, iterate, and even first ship, in HTML5. Once you know what you need, if necessary, take the time to do native code. This doesn't just apply to the old desktop (as it has for years). It also applies to today's polished, fluid mobile world.”

The money and time saved in the process will be much better utilized when it goes towards business development, finding a cofounder, low-cost advertising, content creation and finding that sweet, sweet Product Market Fit!

Niket Anjaria manages  Alpha Software 's prototyping and development solutions geared towards SaaS and mobile entrepreneurs. Alpha Software is a CoFoundersLab Matchup Boston sponsor.

Niket Anjaria manages Alpha Software's prototyping and development solutions geared towards SaaS and mobile entrepreneurs. Alpha Software is a CoFoundersLab Matchup Boston sponsor.

 

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Two Moms Recruit Advisers on CoFoundersLab to Help Activity Rocket Take Off

Finding camps and classes for children is a painful process that all too many parents have experienced. Both sides are lacking the time and resources needed to make it a smooth process. Parents have trouble finding exactly what they are looking for, which may only come after an exhaustive online search. Camp/activity providers lack the digital marketing tools to reach those parents. Lisa Friedlander encountered this problem while searching for activities for her then three-year-old. Her friend, Ilene Miller, had recently made travel plans using one of the many straightforward travel sites. The two linked up, and Activity Rocket was created as an OpenTable-type model to make booking a camp/class for children as simple as making a restaurant reservation.

Lisa Friedlander (CEO) and Ilene Miller (COO), co-founders of Activity Rocket. 

Lisa Friedlander (CEO) and Ilene Miller (COO), co-founders of Activity Rocket. 

Lisa and Ilene launched Activity Rocket in October 2011 in Bethesda, MD, but they lacked necessary aspects in starting a business. They needed technology experts to advise them on developing the platform. After attending a CoFoundersLab Matchup event, the pair created a profile, and after hearing about the benefits of a PRO membership, upgraded to PRO members. That upgrade, as well as their diligent responsiveness, led to connections with several people interested in helping Activity Rocket grow. The team has since worked with THREE individuals who have served as technology advisers with, according to Lisa, the potential of becoming part of the management team. CoFoundersLab helped Activity Rocket find the tech talent they so desperately needed, and now they are truly taking off. Lisa explained:

CoFoundersLab allowed us to work with fantastic people at really no cost to our company, and these individuals have truly made a substantial impact on our business.

Activity Rocket has over 600 businesses listed on their site, and have had over 150,000 unique visitors. They are currently a finalist in the Startup Maryland Pitch Across Maryland Bus Tour, competing for a chance to pitch at the InvestMaryland Challenge and win $100,000. Watch the video and “like” it to vote for them!

Follow Activity Rocket by visiting their website here, or following them on Facebook and Twitter.

Activity Rocket is helping parents search for activity providers for kids ages 0-18 in the DC metro area, by type of activity, day, location, and price. Compare and select the best activity for your child, instantly share your choices with friends, and pay for your classes all in one-stop! Happy Kids = Happy Parents!

JOBS Act Title III: 3 Changes Startups Should Be Ready For

Title III of the JOBS Act will dramatically transform the way startups raise capital and interact with investors. The proposed regulations, as written today, permit non-accredited investors to invest in startups under strict limitations: for individuals earning income below $100,000, one can invest a maximum of $2,000 or 5% of annual income, and for income over $100,000 but less than $200,000, one can invest a maximum of 10% of their annual income in any given twelve month period. Startups will have the ability to appeal to mass investor audiences in ways they could never imagine before. For example, companies with a popular app may choose to solicit their own users – “Like our app? How about you purchase some equity in it?” The implications are yet to be actualized, yet many speculate the new regulations will completely revolutionize the startup and venture capital industries.

With this major shift coming in the startup investing landscape, here are 3 things startups should be prepared for:

Wine and dine investors on a larger scale

A great Kickstarter project usually offers an outstanding product for its funders. This is largely because Kickstarter campaigns are donation-based, not equity-based, and the funder’s return on investment (ROI) is primarily the physical product or service itself offered by the company in a timeframe of 3 - 8 months on average. On the other hand, the ROI on equity-based investments is often much further down the road (often 5-8 years or more), so founders need to make sure their investors feel secure today. This often translates to startups spending a considerable amount of time with their investors engaging them in many one-on-one conversations.

conference_call_.jpeg

For equity crowdfunding post Title III though, offering to chat over a coffee isn't going to adequately scale. Startups need to insure that individual investors feel comfortable and trust the team and product to deliver their ROI. Therefore, startups may have to turn to measures with a mass appeal like investor conference calls, free prototypes, and company related promotions for their investors. This might play out well for consumer product companies or media and entertainment businesses that interact and cater to the masses as a part of their business, however, B2Bs may need to be a bit more creative.

Your investors are your best advocates and advisors - now you may have a lot more of them

Venture capitalists are often more confident in their own backyard.  Investors prefer to be a master in their respective industry to know all the players, tricks, and ins-and-outs of a specific industry whether it be mobile, cloud, healthcare, or hardware devices. The actual investment only marks the beginning of a long-term intimate relationship between the parties with mentorship, feedback and oversight. With equity crowdfunding post Title III, startups will likely have a larger number of investors, and the founders can leverage the benefits of this network. Say for example, a healthcare startup runs a crowdfunding campaign and attracts physicians to invest in the company; the startup then gains access to free – assuming the doctor stands to benefit from the startup’s success – and much needed consultations from both industry experts and end users.

On another front, investors are sure to advocate in any capacity to help out their startup and sage investment. From downloading the company’s app to speaking about them at tech conferences, the startup instantly gains a very strong and influential fanbase who openly praises their efforts. A larger network of investors means more people talking about your company, telling their friends and colleagues, and sharing your company on social media.

The lean startup can put on a few pounds early on

Most businesses and ideas are initially funded from the founders themselves, a bank loan, and/or a network of friends and family. Title III will both help formalize the process of raising a seed round from this network, as well as allow an even broader pool of both accredited and non-accredited investors to participate. According to a 2012 report  from the Angel Capital Association, there are roughly 8.7 million individuals that are currently eligible to be accredited angel investors in the United States. With the introduction of non-accredited investors - the remaining 97% of the population -  the angel investment market has the potential to quickly dwarf the existing VC market, simply by the sheer mass of investors that will be able to participate.

Founders will have the ability to raise more capital at an earlier stage before the big VC firms are willing to look their way allowing some startups to scale faster earlier without the pressure of running out of money.  Obviously, these startups would still need to be “lean” in the sense that their investors wouldn’t want them to go on a shopping spree, but at the same time more startups will be able to weigh the cost of selling equity early on in order to grow rapidly in the fast-paced and ever evolving industries of today.


Big-Check Crowdfunding Campaign Propels Züm XR Forward

Based in Denver, Colorado, Züm XR (www.zumxr.com) has developed a patented, time-release delivery system for food and beverages. This system safely releases natural and healthy ingredients like Vitamin C, electrolytes, and green tea caffeine over several hours. Their first product is a widely successful beverage line that supplies sustained energy without the crash or jitters associated with typical caffeinated drinks. These drinks became the 2nd best selling energy drink at Whole Foods Market-Rocky Mountain after only four months. Robert Nichel, the founder of Züm XR and a seasoned biochemist, was inspired to create this innovative system after realizing the shortcomings of caffeine and electrolytes absorption during his frequent long bike rides in the Colorado mountains.

Robert and the founding team began aggressively pursuing investors and angel groups after recognizing the needs to raise funds. Taken aback by the drawn-out process involved with angel groups, Züm XR turned to crowdfunding. Within 90 days, they closed a $1.5 million round in funding, which will go towards third-party testing and validation to substantiate their impressive label claims of nutrient absorption by up to 60%. This testing will provide scientific support for the brand, bolstering the credibility and ultimate success of the company.

Successfully raising $1.5 million is not the only notable achievement of this disruptive company; they also debunked the myth that crowdfunding consists of exclusively small contributions from a large pool of people.  Züm XR managed to raise their funding from a short list of investors with an average investment/check size of $100,000. Their aggressive outreach was fortified by their traction and revenue in over 120 stores and substantial press coverage from sites like The Motley Fool and The Examiner.

The team at Züm XR really enjoyed our hands-on approach and active marketing efforts here at Onevest. Here is what Nichel had to say about his experience on Onevest:

Onevest played a vital role in helping Züm XR reach our funding target. Their platform provided all the tools and support necessary for us to connect with accredited investors throughout the U.S. Onevest has a great team, an easy to use platform, and quickly generates exposure to a vast amount of active investors that can expedite the funding process for small businesses.

Moreover, Robert also noted that he liked how Onevest saved him valuable time, energy, and money traditionally associated with fundraising. Züm XR immediately began drawing interest from investors after launching their campaign on Onevest, allowing them to raise money quickly, ultimately providing more time and opportunity to grow their business.

We look forward to continuing to follow Robert and his team’s progress at Züm XR, and of course to enjoying their awesome beverages!

You can follow Züm XR on their website here, as well as on Facebook and Twitter.