The Roadmap – Part Three: Making A Sale

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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 making your first few sales and validating your product.

Timescale: 1-2 weeks

Skills: Communication

Success: Getting 10 people to part with their cash and thus validating your idea.

Failure: If your vision doesn’t sell, go back and change it.

Every company needs to sell something. If you’ve read the Roadmap this far, we’re going to assume you’re not a $mm funded Y-Combinator Alum with a crack team of devs working 18 hour days (though if that is the case, come say hello!).

If you’re bootstrapping, you can’t bet on virality. Plan for it by all means, but please, don’t try to build Facebook.2 from your kitchen table.

Sales are financial validation.

But wait… you haven’t built anything yet…

 

Why build something nobody wants?

  • Ash Mayura

 

Do you really want to risk writing ‘000s of lines of code before selling to 10 people?

Full disclosure: We did this bit badly. We put it down to lack of experience/balls. Honestly: define a vision/demographic, set a price, and go pitch it.

Setting a price

There are hundreds of articles about how to charge for your service out there. I’d advocate a Keep It Simple Model. You’re not trying to innovate here, you’re trying to validate.

 

Higher up-front payment = Higher levels of validation

 

As a basic level, I’d go for up-front annual subscription. Try a higher price than you think, then discount it if people resist.

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Find some people to sell to:

Finding sales targets is also an issue, but we found two neat ways to do it.

Here’s a simple way to validate your pricing digitally:

  • Set up a PayPal/Stripe Account

  • Build a landing page on Onbounce/Wordpress

  • Set your vision out with a clear call to action

  • Set your target demographic on Facebook Ads

  • Send users to your page

  • Contact every person who buys directly, explaining the lack of service.

It’s great because it’s very quantifiable, but it will cost only a few bucks to do.

Or if you prefer physically:

  • Create a short sales contract – something with pricing on it

  • Produce some sales literature (iPad/Leaflet)

  • Go to a networking event/street corner where your target demographic dwell

  • Pitch it until people sign up

  • Once someone has committed to paying, explain the lack of service

When you have at least 10 sales (more is good!) you’ve validated the service. In reality, you will have probably pitched it 100’s of times or spent hours tweaking your landing page.

Learning is what you’re after though!

 

You can find the previous part of The Startup Starter Kit, ‘Defining Your Vision’, here.

The next part of the Roadmap, ‘Bootstrap Funding’, is 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 Four: Bootstrap Funding

Nudjed-StartupStarterKit-Roadmap4

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 bootstrap funding – how to get your business started up with minimal investment and expenditure.

Timescale: 1-4 Weeks

Skills: Communication

Success: Getting your networks to back your idea for £5k-£50k and increase your runway

Failure: If you can’t raise from existing networks, build new ones, or re-evaluate if this is the strategy for you.

By now you should have a sales-validated vision, in a sizeable market. Which means you’re ready to kick on to investment. Not a lot, just enough to get you to the next phase. But, there’s a few ideal criteria for your first round of investors to bear in mind:

  • You want them to like you

  • You need them to understand the vision may still change

  • They have to be in for the long-run

If they can also bring useful contacts for your business, or extra funding contacts, great.

Ideally you want to raise enough to keep you running for 12 months on a light-burn rate (then you’re going to spend it in about 6). That’s enough time to get things wrong, build a product and recruit anyone you need.

For a 1 man band, this could be as little as £5k, for us it was £50k. There’s a few rules we set out for ourselves that I think are pretty sensible now:

  • Don’t take less than £5k from one person – it’s not worth it

  • Don’t take all the money from one person unless they are a dream investor

  • Keep the term sheet simple. If people want complex terms, say no.

We raised from friends and family using a mechanism called a convertible loan note. You can research it yourself, but the benefits of it are mostly that you can delay valuing the business.

Hint: Your business has no value at this stage. People are betting on you.

You can find the previous part of The Startup Starter Kit, ‘Making A Sale’, here.

The next part of the Roadmap, ‘Building an MVP’, is 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.