Richard Green made an interesting post to the London Android User Group mailing list.
Advice needed – how to persue one’s venture: – The London Android Group – Londroid (London, England) – Meetup.
This got some great replies that I recommend reading to anyone who is interested in Smartphone development or similar start-ups.
Here I link to a couple of replies that I find interesting. Thai Tran (1 of 3) gives a great description of his experience of the VC route and Ollie Cornes puts forward many suggestions that I agree with strongly.
My own reply is here.
There are many great replies to this thread and rather than repeat their points I will comment on a couple of them.
Thai and Ollie describe both ends of the VC/Not VC spectrum very well. Personally I founded a multimillion dollar start-up during the first dotcom boom and recognise Thai’s scenario very well. You need to know that externally funded businesses are about making money not making software. My consultancy www.elephantpm.com helps start-up businesses do just that (plug).
This time around for my own software business I am going the self-funded route; 50% consultancy and 50% development because I want the control and flexibility that this gives me.
For me the most important point is that that made by Ollie. You need a business plan. Nobody should invest even their own time in venture without knowing why they are doing it. Again, the suggestions in Ollie’s first paragraph are those I would have made.
How to make a draft business plan the ElephantPM way. Allow 4 hours and write everything down.
- Determine own cash situation and hence risk tolerance
- Do you have 6 months cash in the bank and/or rich wife, father etc?
- If you do then you can take high level short term risks
- Can you easily earn big money on short term contracts if you need to?
- If you do then you can choose to take high level short term risks
- Having determined your risk tolerance choose an approach
- Sale + support contract (lowest risk)
- Partnership (low risk)
- External investment (high risk)
- Mortgage your house (very high risk)
- Having chosen an approach, create a revenue plan
- How much revenue can you generate in 30 days – how much labour would you need to put in?
- How much revenue can you generate in 60 days – how much labour…
- How much …90 days – how much labour
- Where is that labour going to come from?
- External resources
- How are you going to pay for the labour
- Profit share
- Equity in a start-up
Now discuss this document with as many people as you can. Over the next couple of iterations you will evolve the plan to have more on marketing and sales and costs and end up with something that you believe in. This plan should be good for about 3 months with a major review each month when you change it if necessary.
Do not write one line of code until you have completed this document.
Good luckJames Bayley ElephantPM www.elephantpm.com +44 (0)7989 381331 Skype: jamesbayley1