Startups Stack Exchange Archive

Decide about investor and market (when?, who?) in many probabilities

We have a startup project (web app) in idea stage we planed to do the prototype (MVP) then go to the investor

question 1:

how can i decide if it is good to have investor in idea stage or later after finish the MVP

then after we studied this project we decided to have two main parts

1- core will be the smart algorithm which can be applicable in many kind of container

2- The container: it is the shining container of our core there are many containers can fit our core

example: expert system web application

core: the code and algorithm of this expert system

containers: medical app, mobile maintenance app, servers maintenance app … etc

question 2:

each container has different market and we plan to serve all later but not in the MVP, so how we can decide about which one we should start with

which one will be the first target market

now as I said we are going to have investors later

so some kind of markets do not have a lot of investors if we compare with the other (for example: servers maintenance has more than medical)

question 3:

should this effect on our decision about which market if it has investors more than the others

sorry for long question, Thank you

Answer 7908

  1. It is always good to have investors at any stage. As others have mentioned, it might be difficult to get them interested at this stage, but if you find an investor that likes your idea there is no reason to wait. The process of pursuing investors will help you refine your idea, so it isn't really lost time, anyway.
  2. There are quite a few tools and service for market analysis that you can find with a simple web search, but I would suggest Google Trends and Google Insights for getting a general lay of the land.
  3. If investors are keen to help with specific containers then by all means follow the money. The investors' help with marketing in the area they are familiar with could be even more valuable than their cash.

Answer 7886

1) It is usually very difficult to attract investors with only an idea. You should at least have a prototype or even better some paying customers to convince investors of your business. Also consider that the better you can convince an investor of your idea and the less risk the investor sees in giving you money, the better you can negotiate a good deal.

2) This is a tough question, there is definitely not only one correct answer. Personally I would recommend to choose a market where you can turn your idea into profits within reasonable time. Profits are what will keep your company alive …

3) Depends whether you absolutely need an investor. I stick with the answer to question two: choose a market where you can turn your company profitable soon. Thinking about investors: they don’t give money away for free, they want to turn their money into more money within reasonable time - and companies with no profits are (usually) not a good investment.

Answer 7889

This is more of an idea/suggestion/thought. Have you considered making the core open source? If your marketing team does a good job identifying the right vertical, you could make so much money in that vertical that you wouldn’t need the other “containers” and you could benefit from many others helping to build the core. And everyone else would benefit by the other containers getting built sooner, since you have a lot of people taking advantage of the core.

Sure that splits the market lowering you profit potential, but bringing in investors is going to dilute your share of the profits anyway. Personally, I would rather work with a bunch of people helping me build something (OS developers) than having people that don’t understand the product telling me what to do with it (investors).

All content is licensed under CC BY-SA 3.0.