In the maze of opportunities, the direct path often turns out to be faulty and so it goes with startups. Taking obvious steps, most IT enthusiasts skip one important move, without which their way to success will most likely become much longer and frustrating. VP of Growth at LITSLINK, Sergiy Tsymbal, explains how to avoid one of the most common mistakes startup entrepreneurs make.
How do most Silicon Valley startups embark on their entrepreneurial journey? They usually start by deciding to create some kind of mobile app. They try to attract as many investments as they can (sometimes using their savings) and then start looking for outsourcing companies all over the world that might help them turn their impressive idea into a full-fledged product while using the humble funds they managed to raise.
According to Sergiy Tsymbal, this approach is fundamentally wrong. Many young entrepreneurs believe they will find $30,000, build an application in a couple of months, acquire the first users quickly, and their customers will love the product. They pitch it to investors and expect the latter to give them a couple of millions for scaling the business further.
In the real-life environment, you’ll need much more time, and you’ll have to sacrifice a lot of functionality due to budget limitations. Eventually, your app will most likely still be imperfect. And many users who will download it, unfortunately, will find bugs and leave negative reviews. With such a product, you’ll need a lot of time to find investors, explaining to them why you have a 2-star rating in the App Store. And even if you manage to do it, the amount of funds you’ll raise will be much less, and you will get it on much worse terms than you expected.
What strategy could be more effective? Mr. Tsymbal claims that building an application is not the right step to start with. It is more reasonable to invest 10-15% of your budget in making a stunning clickable prototype. You’ll need about 1-2 months to create and polish it, but it will look much better than the app made for $50,000. By presenting this prototype to investors, you can raise enough money to invest more, say $100,000+, in product development.
Having access to more financial resources can help you build an app that will impress the target audience and meet their expectations. After launching a full-fledged product on the market, you will have thousands of satisfied users, and it will be much easier for you to attract the additional investments needed to develop your business further. To put it simply, instead of pitching a questionable app to investors, present them a perfect prototype and raise money to build a flawless product.
“Unfortunately, novice entrepreneurs often do not realize such a possibility. This is one of our most important tasks when working with startups,” says Mr. Tsymbal, “Help people take the right steps in the right sequence to save their time and achieve better results. This is especially important in times of crisis when it is even more difficult for startups to raise investment”.
Benefits of Prototyping
In addition to attracting investments, prototyping has some other important advantages.
The most important is a high-quality prototype because it minimizes the financial risks. You can test it, add, remove, or modify its elements, receive feedback from users, update it until you get the perfect result. At this stage, changes can be easily implemented without substantial time or financial losses. On the contrary, making changes to the ready-made product will require a lot of resources.
Also, the prototype simplifies the interaction between all participants in the development process: between customers, programmers, and designers. When you have a clear clickable detailed model of the future app, this eliminates the possibility for misunderstandings and helps to ensure a shared vision.
Prototyping or a product design is an important step in creating an application. It requires a relatively small amount of time and financial resources, and it will help to further your savings of both in the future. By presenting a quality prototype to investors, you have a good chance to raise the needed investment funds to create a flawless product that will allow attracting additional funds for product development. Also, the prototype enables you to upgrade your future application even before you start its development. Finally, the prototype will allow for better communication between the customers and the developers, helping to minimize misunderstandings and errors.
If you are looking for high-quality software development services, reach out to LITSLINK and we’ll make your product stand out!