Advice needed for new web start-up

camillov

Hi,
I'm currently in the process of setting up a new website, I have no tech background, purely business and sales so I have sourced somebody to complete the back end and front end/design aspects of the site.

I'm a little unsure as to my best way to get the site off the ground due to the minimal amount of money I have. My current plan is to get my web developer to create 5 static pages that I can use for the short video I will be creating to crowdfund the site in order to get the site properly built!

If anyone has any suggestions on better ways to get a start-up off the ground or any previous experiences they could share with me I would be greatly appreciated.

Thanks

Trojan

Do as much planning as possible. Either with, or before you engage, the designer, draw out each page of your website on separate sheets of paper. As much detail as possible, do multiple revisions if necessary, and then walk through it.

A good designer will start by asking you questions about the business, not the appearance.

camillov

Trojan wrote: »

Do as much planning as possible. Either with, or before you engage, the designer, draw out each page of your website on separate sheets of paper. As much detail as possible, do multiple revisions if necessary, and then walk through it.

A good designer will start by asking you questions about the business, not the appearance.

Hi, many thanks for your reply!
I obviously wasn't clear with where I currently am etc!

As regards to working with designers and developers, I'm pretty clear with them as regards what I'm trying to create, in depth plans completed, visuals etc.
Just looking for some guidance as regards after that stage!

So I work with a web designer and developer and get my prototype website together with 5/6 of the main pages and features of the site. Its the next step that I'm looking for advice and opinions on.
Whats the best way to fund or look for funding to get my website built? Is crowdfunding a viable option in your opinion? Equity/payment offer to the developer/designer to get it built?
Or any other way that in your opinion is a viable option for me?

many thanks for your help and advice

Gotham

This post is not going to be very nice, at least I warned you in advance.

Crowdfunding is certainly the flavour of the year but it's basically begging. It depends on what kind of image you want to present to people, what kind of people are going to be interested and what things you have to offer backers in addition to your project being completion.

If youre targeting young metro hipsters then crowdfunding is a good idea, but you need to be targetting the guys who have money - students probably wont do. Anyone who buys starbucks, wears a manbag and owns a mac laptop. Then you need to have reasonable rewards for these people, for example, promise that you'll give them some part of the product or service so they feel like they've paid for something as well. I myself would have ethical issues with all of that, but that's just me.

All in all, I don't see crowdfunding working too well in Ireland with the exception of the demographic I listed above. Unless you were to disguise it as something else - which may have even more ethical problems. International business would have a lot better chances.

If you go for the crowdfunding option, you'll need to go fast because I don't see it hanging around much longer. It's very easy to abuse and scam and it's quickly getting a bad reputation - you might still be lucky if you get in fast.

There is a trend happening currently:
People set up ambitious cool Kickstarter project with 100k goal.
Project is slow, gets maybe 15k. (If the 100k goal is not met, all of the money is returned to the backers).
On the last day, the person setting up the project borrows 85k, puts it into the fund to ensure the kickstarter doesnt fail.
And walks away with a 15k profit with absolutely no intention of making the project and no legal requirement to give the money back.

In short, crowd funding is basically "pay me money because I'm an ideas man and I may or may not complete the project I promised without any liability or refund if I dont". People are getting sour tastes in their mouth after the many high profile debacles on kickstarter and indiegogo.
Google "kickstarter scams" and spend a few hours reading to see what you think about it yourself.

Have you considered seeking funding from Enterprise Ireland?

camillov

hi many thanks for your reply!

I understand exactly where youre coming from re crowdfunding and appreciate what youre saying regarding the reputation associated with being on any of the platforms.

Yes Enterprise Ireland is a big option of course along with a few other agencies similar to themselves! Although they carry many contingencies re capacity to employ a certain amount of people but is probably more viable once I have a working, live website with the various revenue streams in use!

Aside from that option, what in your knowledgable opinion is the best way to get a site from the stage I am at right now (minimal cash) to up and running?

thanks for taking the time

Gotham

I need to know a little bit more about things.

I'm assuming your project is a service rather than a product by the way youre explaining things, right?
Does your site have hosting and a domain?
If not, does it need to be .ie?
Do you know if your site will require more than just web hosting? Or will it require dedicated hosting? (Ask your developer)
Do you intend selling stuff on the site, or having a login feature?

28064212

The technical details aren't really important at this stage tbh. It's extremely unlikely you find a developer that is going to work for equity. You're going to need to pay them. So your problem is simple: You need money. To get money, you need investors. Why do investors invest? In order to make more money.

So you need two things:

1. access to investors
2. the ability to persuade them to invest

The first part, I can't help you with. Enterprise Ireland might be able to put you in touch with people looking to invest, or there might be roadshows/exhibitions where you can contact investors. You'll have to look into it.

So the second part: Lets say I've €100,000 to invest. Why would I invest it in your start-up? Can you show me how you're going to take that €100,000, and turn it into €200,000 in two years?

• Have you costed your business? Get quotes from development companies for how much it would take to build the actual site. How much will hosting be? Will you need a support team?
• Do you have a marketing plan? How much will it cost?
• What are your competitors like? How much room is there for a new company in this space? Why would someone use your site instead of an established one?
• What's your projected user growth rate? How does it compare to similar start-ups?
• How are you going to make money? This one's critical. If your answer is either "I don't know" or a one-word "Advertising", no-one will give you a penny.

The Corinthian

I would be weary of crowdfunding. I've read recently that it's become a very competitive market, with sizeable budgets now being spent on promoting crowdfunding pitches. Additionally, as Gotham suggested, it attracts a particular demographic of investor - 30 to 45, male, hipster, ABC1 and technically clued in. This is why you'll see start-ups who want to bring out an updated version of a ZX Spectrum game do well, while many more worthwhile but 'unexciting' projects go ignored. So I' suggest you have a good read of people's experiences of crowdfunding, before you waste any time on what could well be a dead end.

Private investors and VC's, on the other hand, are potentially viable, but only if your proposed business is. 28064212 has already covered the bullet points, and I wrote a related post elsewhere a few months back that deals with the issue.

As to developer sweat equity, I would recommend you remember two things:

• Don't overestimate the value of an idea. Selling yourself is actually more important. If you're afraid that someone could easily steal your idea and run with it, that's a bad sign, because that means you're easily replaced and probably more easily than they can be. So when offering a percentage, consider this, because no one likes to do all the work and get a small cut at the end.
• Sweat equity has a monitory value. It's easy to calculate; going rate by time. So if someone is going to develop something that takes even just three solid months, they've effectively investing a nice five figure sum into your company. And they are investing it, because there is an opportunity cost involved - they could be charging money for the time they spend on your venture.

As such treat them as investors. They're not working for free, but for a return, so the more you convince them, as with any investor, that they've a good chance of making one the better.

Another approach is to lessen risk - the hybrid approach. Smaller percentage, but also a discounted (from market rates) hourly rate is paid. So say market rate is 75 per hour and pure sweat equity for six months full-time development would be 45%; one model is to pay 2/3 in equity, 25 per hour and 30% equity.

As Trojan said, plan as much as possible, but would add research, research, research. At the end of the day, you're going to have to convince someone to part with their time or cash on what is ultimately a gamble. So if you don't come across as a gamble worth making, you'll get no one willing to take a punt on you.

camillov

Gotham wrote: »

I need to know a little bit more about things.

I'm assuming your project is a service rather than a product by the way youre explaining things, right?
Does your site have hosting and a domain?
If not, does it need to be .ie?
Do you know if your site will require more than just web hosting? Or will it require dedicated hosting? (Ask your developer)
Do you intend selling stuff on the site, or having a login feature?

Yes the website is a service...like an open platform!
Yes hosting and domain all sorted......ie and co.uk is set up!
Yes the site has a login feature, techincally not selling anything tangible, more selling a service!
Thanks again

camillov

28064212 wrote: »

The technical details aren't really important at this stage tbh. It's extremely unlikely you find a developer that is going to work for equity. You're going to need to pay them. So your problem is simple: You need money. To get money, you need investors. Why do investors invest? In order to make more money.

So you need two things:

1. access to investors
2. the ability to persuade them to invest

The first part, I can't help you with. Enterprise Ireland might be able to put you in touch with people looking to invest, or there might be roadshows/exhibitions where you can contact investors. You'll have to look into it.

So the second part: Lets say I've €100,000 to invest. Why would I invest it in your start-up? Can you show me how you're going to take that €100,000, and turn it into €200,000 in two years?

• Have you costed your business? Get quotes from development companies for how much it would take to build the actual site. How much will hosting be? Will you need a support team?
• Do you have a marketing plan? How much will it cost?
• What are your competitors like? How much room is there for a new company in this space? Why would someone use your site instead of an established one?
• What's your projected user growth rate? How does it compare to similar start-ups?
• How are you going to make money? This one's critical. If your answer is either "I don't know" or a one-word "Advertising", no-one will give you a penny.

Thanks for the reply!
So all of the above advice and questions have been thoroughly gone through in detail and a full business plan is in place....this my strongpoint, clear vision, I know exactly where I want to take the start-up!
I'm simply looking for advice and opinions on how I can take a website that will have 5/6 static pages to the next stage which is built in full, whilst majorly bootstrapping!

Once I have a working live website with all the features on it, I know exactly how I will market it etc.

many thanks

camillov

Thanks for the reply The Corinthian!
Interested in the hybrid approach as the entire key for me to seek any form of investment is to have a "team" in place! People that are involved in the start-up in some form of equity capacity due to my skills and focus being sales, marketing and primarily the vision behind it.

So Crowdfunding is an option but from the sounds of it not ideal, Enterprise Ireland is an option although a tangible live website would be a huge advantage for me when seeking investment.
Aside from those main options and VC's is there any other ways I can reach between 4-€6,000 to get the website fully built and live?
I have a potential partner with tech skills, I have access to free office space, €1,000 start-up expenses covered, potential for grants once the website is up and running and the massive potential to roll out revenue streams shortly after we're up and running!

how does all that sound?
Many thanks again

The Corinthian

camillov wrote: »

Aside from those main options and VC's is there any other ways I can reach between 4-€6,000 to get the website fully built and live?

A bank loan. Savings. Borrow from family. Putting your money where your mouth is, you should remember, is also a confidence building exercise - if you're not willing to risk your own money on your 'idea', how can you seriously expect others to do so?

I have a potential partner with tech skills, I have access to free office space, €1,000 start-up expenses covered, potential for grants once the website is up and running and the massive potential to roll out revenue streams shortly after we're up and running!

Why do you need an office? An office address, for the paperwork, sure, but in the early stages of a venture an office is a waste of money - even when free, because there's still a cost associated in commuting to an office or eating out for lunch.

As to the rest, it's all potential and I really don't know what that means here. Potential can mean that you've done serious research and number crunching and this is a realistic expectation, or it can mean pie-in-the-sky bullshìt that's all fur and no knickers.

Ultimately, your task, as someone who wants others to part with their time and/or money, is to be able to convince them of this potential.

Smoggy

Can you tell us the name of URL?

You have peaked my interest.

P.s I have no money or time to invest, just being nosey.

Graham

Have you checked your site/service is one that Enterprise Ireland would be interested in supporting? Does it have high growth international potential?

Have you checked the crowd funding sites to see if your type of product/service has seen much (any) success raising funds? Crowd funded projects are often supported (financed) by people buying the product in advance, do crowd funding websites reach your target market/customers?

How are you planning to drive traffic/supporters to your crowd funding site? The crowd funding sites essentially recommend you bring your own crowd, do you have a crowd?

If all your business needs is €4k - €6k to get off the ground, I'd forget about E.I./crowd funding/VC's and follow The Corinithians suggestions.

If all your business needs is €4k - €6k to get off the ground, what's to stop one of the incumbents in your target market/industry deciding to eat your lunch?

What experience do you have in your target market/industry, any contacts or potential customers or are you coming to this with an idea and a couple of years general business/sales experience? When you say you have business/sales experience, have you run a business before, managed people, sales teams, tech teams, managed finances?

P.S. I don't particularly to answer any or all of these questions but you should have considered them and have answers for them.

camillov

The Corinthian wrote: »

A bank loan. Savings. Borrow from family. Putting your money where your mouth is, you should remember, is also a confidence building exercise - if you're not willing to risk your own money on your 'idea', how can you seriously expect others to do so?

Why do you need an office? An office address, for the paperwork, sure, but in the early stages of a venture an office is a waste of money - even when free, because there's still a cost associated in commuting to an office or eating out for lunch.

As to the rest, it's all potential and I really don't know what that means here. Potential can mean that you've done serious research and number crunching and this is a realistic expectation, or it can mean pie-in-the-sky bullshìt that's all fur and no knickers.

Ultimately, your task, as someone who wants others to part with their time and/or money, is to be able to convince them of this potential.

Thanks for the advice.....I really appreciate the honesty!

camillov

Graham wrote: »

Have you checked your site/service is one that Enterprise Ireland would be interested in supporting? Does it have high growth international potential?

Have you checked the crowd funding sites to see if your type of product/service has seen much (any) success raising funds? Crowd funded projects are often supported (financed) by people buying the product in advance, do crowd funding websites reach your target market/customers?

How are you planning to drive traffic/supporters to your crowd funding site? The crowd funding sites essentially recommend you bring your own crowd, do you have a crowd?

If all your business needs is €4k - €6k to get off the ground, I'd forget about E.I./crowd funding/VC's and follow The Corinithians suggestions.

If all your business needs is €4k - €6k to get off the ground, what's to stop one of the incumbents in your target market/industry deciding to eat your lunch?

What experience do you have in your target market/industry, any contacts or potential customers or are you coming to this with an idea and a couple of years general business/sales experience? When you say you have business/sales experience, have you run a business before, managed people, sales teams, tech teams, managed finances?

P.S. I don't particularly to answer any or all of these questions but you should have considered them and have answers for them.

Really appreciate the time you took to respond to me!
You sound like you have great experience in this area and I'd love to fire a few emails to you now and then to ask your advice on certain areas!

If that sounds like something you'd be open to you could pm me your email!
Thanks again

The One Who Knocks

Okay apologies in advance here but I'm going to have a little rant & I'm too lazy to argue so I'm just going to quote several other sources in hopes that you'll see my point.

Stop being so secretive about your idea. – You may be scared someone will steal your idea. Don’t. Just don’t. Such a beginner mistake, not even an amateur mistake, it is just a total rookie mistake. You will never find product-market fit by keeping your idea secret until it is perfect. You need to talk about your idea. A lot. To a lot of people. Because honestly, your idea probably sucks just as much as you are secretly afraid it might. One of the reasons many founders are so secretive about their ideas is because they don’t want to be told it is a stupid idea. This is just denial. Don’t be in denial. Anyhow, the people you are so afraid will steal your idea are too busy working on their own big ideas to steal yours.

The simple answer to how secretive you should be about your startup idea is that you should not be secretive at all. Of course, you do not want to talk about it to anyone and everyone since they might not be interested, and talking to them will just be a waste of time and energy. However, you do want to talk about it to anyone you believe can potentially invest in your company, or partner with you, or become your customer – or at the minimum, give you great feedback.

A few things to keep in mind with that million dollar idea of yours:

NO ONE WILL STEAL YOUR IDEA
Everyone with entrepreneurial spirits, who you fear will steal your idea, has their own set of ideas. They are certainly more passionate about their idea than yours. Even if they are not building any of their ideas at the moment, chances are zero that they will drop everything and rob you.

SOMEONE IS BUILDING IT ALREADY
If your idea is worth building and there is no one live with it yet, almost 100 percent of the time, that idea of yours has occurred to many others already - and chances are that someone is already building it. You already have competition. This does not mean that you are late. It only means that you are on the right track because it validates your idea altogether.

SELLING FIRST IS VITAL
Unless you can sell your idea almost before you build it, it’s not worth building it. Noah Kagan has a full-blown course which helps you sell before you build. I recommend you check it out. You cannot sell unless you talk to people about the solution you are planning to provide.

YOUR VISION IS BLURRED
A new idea that occurs to you definitely excites you a lot. Mentally, you are all for it and have decided to build it out. Being entrepreneurial, you would also not mind investing a major part of your savings building it and starting it right this moment. At this point, your vision is blurred, and you won’t be able to see anything that can fail this idea. Talking to someone might just grant you the ‘aha’ moment of why you do not want to invest in it or make changes to its execution.

That being said, every entrepreneur is different and has her own style of working. If you still do not want to share your idea with anyone, do ensure you build out a minimal product without spending too much time and money on building it completely right, according to your vision. If you can sell the bare-bone idea, you will certainly have the first mover’s advantage and enough traction to build it forward.

You’ve got an idea for the next big thing, a new iPhone application that could change the world, and you’re looking for developers and/or looking to raise capital. You are not entirely certain where to turn so you reach out to local entrepreneurs who have ‘been there and done that’. I get calls like these all of the time. Prior to 2008 most entrepreneurs here in North Texas were scared to share their ideas without getting an NDA in place beforehand. This put them at a HUGE disadvantage over their peers on the West Coast where collaboration and community have a long and distinguished history. Slowly but surely, the startup community in North Texas has morphed and has become very collaborative and supportive. But, every once in a while you’ll run into someone who is still clinging to the old, secretive ways of the past.

In fact, just yesterday I got a message from an acquaintance who told me he was working on a an app and asked me to put him in touch with local investors. I suggested he send me his deck and I’d make a few introductions. His response? He wouldn’t send it unless I signed an NDA (he obviously doesn’t read my blog). He explained that someone with experience could steal the idea in a second. I’m not sure why, but I felt really offended at the time. I guess part of the reason was that I was mid-move – surrounded by boxes and movers – but it felt weird to have someone asking for a favor AND at the same time explain that he didn’t trust me.

At the end of the day ideas are worthless – execution is priceless. When you’re starting a company you need as much help as possible. You need mentors, advisers, peers, partners, investors, vendors and friends. If you keep your ideas a secret it will be impossible for anyone to actually help you. Could someone steal your idea? Of course, but as I’ve said before your potential competitors are more likely to become partners. You’re far more passionate about your idea that anyone else – and most people want to partner with people with passion. Additionally, keeping your idea a secret may actually create more competitors. I explained my thinking in a post a few years ago, but Chris Dixon does a much better job explaining it than I did in his post, “Why you shouldn’t keep your startup idea secret.“

Why you shouldn’t keep your startup idea secret

A frequent question entrepreneurs have when they are just starting their company is: how secretive should I be about my idea? My answer: you should talk about it to almost anyone who will listen. This includes investors, entrepreneurs, people who work in similar areas, friends, people on the street, the bartender, etc.

There are lots of benefits to talking to people. You’ll get suggestions for improvements. You’ll discover flaws and hopefully correct them. You’ll learn a lot more about the sector/industry. You’ll learn about competitive products that exist or are being built. You’ll gauge people’s excitement level for the product and for various features. You’ll refine your sales and investor pitch. You might even discover your idea is a bad idea and save yourself years of hitting your head against the wall.

In terms of the risk of someone stealing your idea, there are at best a handful of people in the world who might actually drop everything and copy your idea.

First of all, most people will probably think your idea is stupid. This does not mean your idea is stupid. In fact, if everyone loves your idea, I might be worried that it’s not forward thinking enough.

People at large related companies almost always think they have already built or are in the process of building all the good ideas – so your idea is either something they are already building (which is a good thing to discover early) or else they will dismiss it as a bad idea. (I have a personal diligence rule that when speaking to people at large companies, the facts that they tell you are very useful but their opinions about startup ideas no more valuable than any other smart person’s opinions).

In terms of speaking to other entrepreneurs, the vast majority are already working on something and are highly unlikely to drop everything and copy you. Even if they are in the idea generation phase, high integrity entrepreneurs wouldn’t copy your idea anyways.

VC’s will either not like your idea, or else like it and possibly want to fund you. They vastly prefer funding an existing team than taking an idea and building a team. The one risk is if they have entrepreneurs they are working with in a similar area (see next paragraph). Most VCs have enough integrity to disclose this and let you decide how much detail to go into.

The handful of people in the world who might copy your idea are entrepreneurs just starting up with a very similar idea. You can probably just explicitly avoid these people, although by talking to lots of people your ideas will likely seep through to them.

Even if your idea gets in the wrong hands, they will probably just get the high level “elevator pitch” which isn’t worth much anyways. Hopefully by that time you’ve developed the idea much further and in much greater detail – by talking to as many people as possible.

A note about NDAs: 1) almost no experienced entrepreneurs/VCs will sign them (in fact, you asking them too is widely considered a sign of inexperience), 2) It’s not clear they have any real value – are you really going to spend years suing someone who signed an NDA? I’ve personally never heard of it happening.

Sorry I don't mean to pick on your idea in particular, but I'm seeing a lot of this on boards lately and it's very annoying.

[/RANT]

camillov

Ok Ill make a few things clear to you.

I have never once stated that i'm keeping my idea "secret".
I'm well aware in the beginning its crucial to talk to as many people as possible.
So instead of copying and pasting a post, read my posts and others and see that im not focusing on the idea here and instead advice on the execution and taking it to the next level.

I'm not sure what part of that is annoying to you

The One Who Knocks

camillov wrote: »

I have never once stated that i'm keeping my idea "secret".
I'm not sure what part of that is annoying to you

True, but you tip-toed around it at the same time, with very general answers like

camillov wrote: »

Yes the website is a service...like an open platform!
Yes the site has a login feature, techincally not selling anything tangible, more selling a service!

Then you also ignored Smoggy's request for the URL.

Smoggy wrote: »

Can you tell us the name of URL?

I appreciate that you're not focusing on the idea in this thread but instead on the execution. However, it would make it easier for us to help you if we knew more about your idea as different strategies suit different businesses.

It's a bit like shooting in the dark here, maybe crowd funding would suit your business, maybe not. Maybe you should go the route of pre-selling, maybe not. Either way, it's too hard to tell without knowing anything about your startup.

camillov wrote: »

I'm not sure what part of that is annoying to you

Again I didn't mean to pick on your post in particular, but I just wish people were more open when seeking startup advice.

croo

I just wish people were more open when seeking startup advice.

I just wish they'd ask in the entrepreneurial forum instead of the tech forum!