Nibletz Staff
Every startup faces the same dilemma – how much should I invest to attract my first major client or customer? In an ideal world, you would already have customers queuing at your door. This would spur you on to start up a formally structured business to address your customer’s needs. Of course, in the real world, many entrepreneurs are also inventors, engineers, and creators. They need a tangible product to exist so that customers know what it is that they are buying.
Building or producing your product before you have an order is financially challenging. You might consider investing your own cash into this kind of project. Ultimately, you’ve already invested your time and energy. Putting up your home or your life savings might be a step too far. What you need are investors. Like you, these investors need vision, or they won’t be able to invest in your idea.
What should you have in place to attract an investor?
You should have fully developed plans or schematics for your proposed building or product. There should also be a comprehensive research pack that highlights and identifies a need in the market for such an innovation. If you can turn any of these plans into a 3D illustration, this can help people visualize what you are proposing. Build a model, or simply invite a good artist to clearly sketch what it is you think this product will be.
Aside from your mockup and your research pack, you’re going to need a very compelling presentation. Brush up on your presentation skills, and make sure you have all the supporting materials you need. Ultimately, you are asking for money to build a prototype. To clarify and support the sum you ask for, you will need to have approached potential suppliers and cost the entire project up already.
Speak to companies that specialize in providing your raw materials and parts. You will have to have to be clear about size, use, and potential hazards or risks. You’ll probably need an aluminum supplier, a timber merchant, and maybe even some land if you’re constructing a building. For electronics and apps, you might need coders, engineers, and board suppliers. You must be confident that you have listed every component and every human resource you might need to get your project off the ground.
Now you need to carefully select the investors that are most likely to be interested in your project. Are you building eco-friendly homes? Then speak to local government planning offices to find out who would be most interested in that kind of project. If you’re developing low-power electronics, then maybe find an investor from one of the major electronics research centers. Online crowdfunding is also an option, but you will most likely need far more investors each offering a smaller portion of the money needed.
You also need to carefully consider what type of returns you’re willing or able to provide any investor. With a bank it’s easy. They simply want the original loan plus interest repaid over several months. What would your main investor most want for their interest, support, and cash injection? This is where you can get quite creative. This is the start of your marketing too. You have to sell the project and make sure your investors are happy to hand over their cash.
If your meetings, proposals and presentations have gone well, you might have the cash you need to build your prototype. However, this isn’t all you need to make sure customers come to you and make orders. Now you need to develop a winning marketing strategy. It should ensure a successful launch and a lot of public interest in your innovative new product. So where do you start?
Will They Come?
It’s important to consider where your target customers ‘hang out’ in the media. Are they using Facebook groups that you could get involved with? Do they all enjoy a particular TV program, or listen to a local radio station? You won’t know the answer to any of that without some careful and extensive research. You have a solution to someone’s problem but who are they? Create a typical customer persona and go from there.
Who are your competitors and what are they offering? Even the most innovative of products has a competitor solution somewhere. SWOT analyses of your competitors and their products are essential if you want to uniquely position yours. Dig deep to determine your tone of voice, branding choices, and use of media to reach your target customers.
Launching a brand new product successfully should help you take plenty of orders. As a startup, you need some experience, training, or connections to draw upon. You need to make your launch as newsworthy, topical and current as possible. What’s your hook? Why should the press print a piece about your product launching today?
A launch event brings interested parties to you, your sales team, and your product. You are there in a professional and formal capacity. Create a positive and memorable experience that customers can associate with your product. Hiring an event manager or a PR specialist is essential here. You have a lot to talk about in the evening, so make sure someone else is handling the catering, bar, and entertainment.
If what you are building, developing, or creating is exciting, then yes, your customers will come. But if they don’t know that it is exciting and solves their problems, they won’t attend, and they won’t make any orders. The prototype you are building is just one part of a wider marketing strategy. It should communicate directly, positively, and successfully to your target customers. That means that your upfront investment should cover more than a few components and materials.
Could you sell your product ideas to an investor without a tangible item in your hand? And could you sell a first-attempt prototype to the whole world? You might have a great idea that leaps off the page. You might have an incredible product that looks innovative and high-quality. But until you have a strong marketing strategy to go with it, nobody will ever know.
