The Roadmap – Part Six: Scalable User Bases

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The ‘Roadmap’ section of the Startup Starter Kit is an outline of the background research you’ll need to do and the steps you’ll need to take to get your business from the ‘idea’ stage to a viable business. If you’ve come to this in the wrong order, start with part 1, Finding A Market. This section will show you how to prove that your user base is scalable, and that your business will therefore be able to continually grow.

 

Timescale: 4-8 Weeks

Skills: Technical, Delivery, Marketing

Success: A happy user-base of over 100 people

Failure: Build a better product, or re-evaluate your service delivery

This stage is all about delivery – delivering the service that users value, to a large enough group that you can satisfy an investor that more people will sign up.

You’ll also want them to be paying enough to show you can break even. That doesn’t mean breaking even now, but it does mean doing a rough calculation of when that will happen.

For Nudjed, we know we can break even at between 2,000-5,000 users based on our current pricing structure. Which, given the size of the health market, is a relatively simple number to achieve. As long as your potential investors trust that you can do that, you should be fine.

Here’s the rough calc:

(Current # of users * Avrg. monthly value) – Monthly Burn Rate

You can run it against high, medium, low burn rates to give you a rough idea of where your sensitivities are. For Nudjed:

(2000 Users * £5 p/month ) = £10,000 p/month

We figured this was a sensible burn rate for a growing business. We also guessed that if we could get 5-10% of this user base, we’d be confident we could look an investor in the eye and say we can break even in 12 months.

Hint : Obviously if you’re have a lower/higher price point, the numbers will change. A 69p app will need thousands of downloads per month to break even; a yacht company would only need to sell one.

For selling process, just refer to the previous section on sales. By now, your proposition should be good enough that a 5-10% user-base will be a couple of weeks worth of selling to your network.

You can find the previous part of The Startup Starter Kit, ‘Building an MVP’, here.


To be the first to know when we publish installments of The Startup Starter Kit, and keep on top of our other great news and content, sign up to our mailing list: nudjed.com/newsletter


The Roadmap – Part Seven: Building A Team

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The ‘Roadmap’ section of the Startup Starter Kit is an outline of the background research you’ll need to do and the steps you’ll need to take to get your business from the ‘idea’ stage to a viable business. If you’ve come to this in the wrong order, start with Part 1, Finding A Market. This section will take you through the process of building a successful team and a trusted board of advisers.

Timescale: 2-8wks

Skills: Recruitment, Communication, Team Management

Success: Convincing credible, skilled people to spend time in your business.

Failure: Not recruiting – not an option if you want to scale fast. Keep trying!

Good investors are interested in you and your team – full stop. Having a good, experienced team will open doors for you in every direction. There’s two levels of team you need to look to develop:

  • Advisory Team –  The more experienced the better, they could be potential investors too. You want them for the networks/experience and you may have to give them equity to get them on-board.

  • Operational Team – The people who do the work. Hire them for attitude over technical skill (both is of course good). You want people who will really care about what you do. Not people who only turn up to get paid.

Don’t underestimate the power of good people to move an business forward. Even at an advisory level, an individual with the right experiences and contacts will open doors in moments, that you may have taken weeks to get to. Then, once you get there, being associated with them will help you even further.

Building a Board of Advisors

Recruiting these people is tough. Treat advisors like investors, as they usually will be. Network with them in the same way as described above, and when it comes to doing a deal be VERY clear about:

  • What they will/won’t do for you

  • The outcomes of this work

  • What they want in return

We operate on an share pool model with most of our advisors, here’s the basic run-down:

  • Being part of the advisory board is worth £X of shares per quarter

  • We meet and review the board quarterly

  • Stock options are paid quarterly in advance

  • A list of deliverables is written up for each board member

  • We review this progress monthly in person

  • Extra work is undertaken at a reduced day-rate

  • Work is agreed prior to being undertaken and is paid monthly, in arrears

  • Work can be paid via equity/cash at the founders’ discretion

Advisors are there to validate your ideas, as much as to contribute operationally. Seriously consider what that means before agreeing any deal.

Building a Team

There’s only one real question to ask when you’re building a team:

What skills do we not have enough of?

The difficulty of this question, we found, is that is nuanced. For instance:

  • Skills now or skills in the near future?

  • Are we good at anything?

  • What kind of person has skill X?

  • Can we combine skill X and skill Y in one job?

To read more about Nudjed’s recruitment process visit www.nudjed.com/recruit

There’s two tools that the Nudjed team use to figure out who we should hire:

Organigrams

Drawing of the whole company in teams. We break ours into 4 sections:

  • Sales (Marketing, Selling, Market Research)

  • Build (Engineering, UX)

  • Delivery (CRM, Accounts, Training)

  • Operations (Finance, Logistics, HR, CPD)

From there, we plot out our short term and long-term gaps:

  • Need – We need this person in the next 3 months to make the business work.

  • Want – We probably want this person in ~6 months as we grow.

  • Temp – We need this person now, but we expect the job to change.

Needs get to the next stage, ‘Want’s get logged and ‘Temp’s get out-sourced or flagged for further review.

Job Descriptions

If you answered the questions above, you should have a clear idea of what kind of person you need and how they fit into your company. Then you need to check if they exist.

Go talk to someone who does roughly the job you’re filling

You’re not trying to hire them at this point, you’re trying to figure out a few softer details:

  • What do they actually do?

  • How did they get to this skill set?

  • Generally what do they and their peers enjoy in work?

  • How much do they get paid/expect to get paid in the future?

  • Are there any good forums, communities, events locally where they gather

I can almost guarantee that after talking to 3-5 potential candidates, you will know roughly what to put in your job description. There’s plenty of good articles out there about writing job descriptions, so I won’t cover that here. But here’s a few tips on what I’d do:

  • Don’t copy a conventional template if the people doing the job don’t agree with it

  • Allow any candidate the opportunity to edit the job description you write (and learn from it)

  • Try to be as clear and specific about the role as you can, it’s your advantage over bigger recruiters

  • Put emphasis on culture and ownership of problems. Most people we employ got on board for that reason

  • Don’t shy away from money talk. Be transparent if you can; you can always directly pitch higher paid people and adapt your pay structure with share options

Recruitment is sales. Be prepared to sell your company! But be honest with people – if you have a short runway and you’re trying to hire a single father of 2, make sure he’s aware of the likelihood of your company dying. Let your employees manage their own risks!

You can find the previous part of The Startup Starter Kit, ‘Scalable User Bases’, here.

To be the first to know when we publish installments of The Startup Starter Kit, and keep on top of our other great news and content, sign up to our mailing list: nudjed.com/newsletter


Seedrs Mixer – Questions from Potential Investors

As part of our ongoing crowd-funding campaign, we attended the Seedrs Mixer. Events like this are a great chance to talk directly to investors and explain in person what it is we’re planning to do.

Throughout the evening we were bombarded with interesting questions. So we thought to save a little time, it would be worth sharing the answers here – both for potential investors, and for founders looking to hone their pitch.


Q – Is the proposition now totally B2B (Business to Business)?

No. But it is our focus. Nudjed has three main barriers to ramping up in the B2C market:

  • A free version. Businesses are much more used to paying for software and as Nudjed can directly affect income, are more open to paying for it. In our research consumers are much more likely to want to trial the app, or ask for a free version, with a view to upgrading or in-app purchases later.
  • A mobile app. Nudjed is currently web based. It works on phones via SMS. But there’s a big draw for consumers to get the icon on their home-screen. For business users, desktops are still the norm. They are much more comfortable with web-first applications.
  • A huge marketing budget/killer viral factor. We’d love both. But for now businesses are a more achievable route to market. They are silos of users and have formal structures that allow us to service them without huge marketing overheads.

We will tackle B2C again in the future. Just right now, we’re nailing the B2B.


Q- What is the scale of the opportunity?

The health market is huge and growing. Health in the workplace is similarly big – 111 million sick days p/year cost the UK economy £29bn (ONS 2013).


Q- Can you only sell to SME’s

For now, yes. In the long run, we can scale to almost any organisation (that’s why we’re raising funds). The key for us is to deliver great service. Over the next six months, we’re only looking to score 3,000-5,000 paying users. That’s about 10-20 SME’s. But they’ll be the case studies that allow us to target larger and larger organisations, with a process that’s been honed down to a tee.


Q- Who are the team, what are their backgrounds?

You can read more about how we started Nudjed here, and more about the whole team here.


Q- How do you plan to affect peoples’ health? How do you deal with the different levels of fitness knowledge?

Nudjed is all about tailored advice and expert knowledge. The system (supported by our experts) is built to learn about individual users and then affect their behaviour. Our product video gives you a good idea of how this works. Watch it here.


Q- What is the structure of the team? What areas are you looking to strengthen with the investment? What roles do the Founders perform?

Our team is broken into 4 areas:

  • Sell – Covering marketing, sales, brand, PR and recruitment
  • Deliver – Covering coaching, experts, account management and CRM
  • Build – Covering Engineering, UX, Quality Assurance
  • Operations – Finance, HR, Administration, Planning

Investment will be spent on strengthening the Deliver and Build teams, whilst we’re working on hiring experts and suppliers to resource the Selling team.

Our founders lead two teams each:

  • Warren (CEO) – Heads up Sales and Build
  • Neil (COO)- Heads up Delivery and Operations

As we resource the teams, individual directors will take control of each aspect (then sub-aspect) of the business, allowing the founders to take more strategic positions at the head of the business.


Got another question? Feel free to ask!

Seedrs Mixer

On October 9th, we attended an exclusive networking event at Runway East in London, run by Seedrs. The event was a chance for promising startups to meet with investors to discuss business strategy and crowdfunding. Nudjed was given the opportunity to pitch to the guests, with Warren speaking alongside Jeff Lynn of Seedrs and Alex Hoye, CEO of Latitude Group.



We had a great time, meeting representatives from other exciting startups that are currently fundraising, including WeStore, Line Up, and Board A Boat. We were also pleased to be able to share the news that we crossed the 50% mark of our own crowdfunding campaign during the evening.

Not least, it was a fantastic opportunity to meet some awesome investors who we hope to build a close working relationship with. There was a lot of interest in Nudjed, and we’ll be creating an article in the near future to provide comprehensive answers.

Big thanks to Seedrs for having us!

What We're Doing With Your Money

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As you’re probably aware by now, we’re currently in the middle of a crowdfunding campaign aiming to raise £100,000 through Seedrs. At the time of writing, we’ve secured £53,400 from 41 individual investors, which is incredible. To reassure our current investors, and encourage potential new investors, we thought we’d map out for you exactly what we’re going to do with your money.

Team Expansion and Wages: With the extra funds, we’re planning to expand our development and content creation teams. That means better products and better service! The goal is to double our workforce over the next six months.

App Development: With extra developers on the team, we’ll be able to push forward with our plans to build and release native iOS and Android apps, which should make the Nudjed service more comprehensive and easier to use.

Consultancy: We’ll be using some of the money to bring in experts to help us to develop the product, to make sure it’s as accurate and effective as possible. This will include behavioural psychologists, technology development consultants, and industry specialists.

Marketing: There will be a marketing budget, to allow us to take our product to as wide an audience as possible and expand our customer base – meaning you get better returns on your investment as the business grows! This includes PR, advertising, and keeping in touch with our users via social media and blog content.

Equipment, Legals, and Overheads: Some of the money will be earmarked for boring things like office equipment, rent, stationary and so on. At Nudjed, we’re firm believers in the power of the post-it note!

So there it is! If there’s anything you’d like to know more about, please don’t hesitate to get in touch: warren@nudjed.com

Seedrs Sign Up Process

To invest in Nudjed, you’ll need to sign up to Seedrs, the crowdfunding platform. This can be a little tricky, so we’ve broken the process down for you here. If you’re still having trouble, feel free to contact us and we’ll do everything we can to help.


Head to Seedrs

To start, head to seedrs.com, and click the orange ‘Join For Free’ button in the top right hand corner:

Visit Seedrs

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Create an Account

You’ll then be taken to this screen, where you’ll need to provide some basic information, or you can choose to log in with Facebook, Google, LinkedIn or Twitter. If you register via Email address, you’ll need to verify the address by clicking a link they send you.

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Before you sign up, you’ll be asked to check a box to confirm that you’ve read and agreed to the membership agreement, which you can download as a PDF.

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Get Approved as an Investor

After filling in your details, you’ll be ask to certify as an investor. Most people will self certify with the Quiz option.

You’ll need to answer a few short multiple choice questions, to demonstrate that you understand the risks involved in investing in startups. Here’s all the information you’ll need to answer the questions:

  • Most startups fail, and if you invest in a startup, it is significantly more likely that you will lose your invested capital than that you will see a return of capital or a profit.
  • If the startup fails, no one will be liable to pay you back the amount that you invest and your investment will be lost.
  • Startups rarely pay dividends and are unlikely to be able to sell your shares unless the investee company floats on a securities exchange or is bought by another company.
  • Even for a successful business, a flotation or purchase is unlikely to occur for several years.
  • If the business raises additional capital at a later date, it will issue new shares to the new investors, and the percentage of the investee company that you own will decrease.
  • Investing in startups should only be done as part of a diversified portfolio. This means that you should invest relatively small amounts in multiple businesses rather than a lot in one or two businesses.
  • You should not invest more money through the platform than you can afford to lose without altering your standard of living.

Hopefully that hasn’t scared you off!


Find Nudjed

Your Seedrs account is now active! The next stage is to find the Nudjed investment page at

www.seedrs.com/startups/nudjed-ltd

and click the orange ‘Invest’ button.

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Choose Your Investment

The next step is to decide how much you want to invest, and whether you want the investment to be public or anonymous. You’ll also need to check the box to indicate that you’ve read the investment agreement.

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Deposit Your Investment

At this point, you’ve pledged your investment, but not actually paid any money. You now need to deposit money into your Seedrs account:

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Prove who you are

Seedrs requires proof of identification before you can invest, for security purposes.

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You’ll have to enter your National Insurance number (in the format AB 12 34 56 C – with spaces and capital letters) and your driving license or passport number. While this seems like a bit of a hassle, it ensures that all investments are legitimate and also that you’re able to prove who you are when it comes to managing your investment portfolio later on.


Make the investment

Once your identity is verified – which should be instant – you will be able to deposit money, either via card payment or bank transfer. You will then be taken back to the ‘Overview’ page, where you will see Nudjed under ‘Investments To Be Paid’:

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Press the ‘Pay’ button, and you’re done!

Thanks again for believing in us and supporting us at this incredibly important stage of our journey. If any part of this guide was unclear, please feel free to contact warren@nudjed.com with any questions.

Nudjed Launch Party – September 2014

On September 24th, around 100 guests joined us at the Life Sciences Hub in Cardiff Bay to help celebrate the launch of our Seedrs crowdfunding campaign.

For us, the event was an opportunity to do three things:

  • To thank you to everybody who has helped and supported us in so many ways throughout the last 18 months.
  • To connect the people we respect and learn from, to the other people we respect and learn from.
  • To launch www.nudjed.com/invest a chance for anyone to own a slice of Nudjed.

View the campaign on Seedrs Here >

This campaign marks the start of the next stage for us at Nudjed. The health industry is changing; the technology that you carry in your pocket is already measuring your health, and soon it will be able to actively guide and improve your behaviours.

“It’s a very competitive market that the Nudjed guys are in but actually there’s nobody better; they’ve built a fantastic team…they really know what they’re doing. So if anyone can succeed, these guys will. I’ve been really impressed by their drive and their focus to make it a success.” – Neil Cocker, Cardiff Start

The health app market is growing 87% faster than any other type of app, and Nudjed fully intends to be a part of that growth. With the crowdfunding platform, we’re giving everybody the chance to be a part of the story, and to own a slice of our success.

Of course, there are risks – we’re a small company trying to crack a huge global market, but we’re confident in our abilities, and so are many big names in the South Wales technology scene.

“I think they tick all the boxes, they’ve created a product that people want to buy…I really think they’re going to succeed.” – David Walton

Check out all the photos from the launch party on Facebook below.