After thinking through the presentations at the MidAmerica Healthcare Venture Forum (MHVF) and the discussions I had while there, I wanted to talk about how I could take that information and make it actionable for startup firms and their founders. To do that, I want to dive a little deeper on just a few topics and tie it all back to some great industry feedback that has just been provided.
The startup process: How are you planning to get launched and does your plan align to what the investors require? Might as well plan ahead as you’ll be calling them for their money sooner than later:
- Business plan development. Like I said in a previous post, money is telling you to start with the problem, not the solution. So, in building your business plan, you should be able to point to the problem, the costs associated with it today that you will alleviate, the revenue you will generate for solving the problem, and how your solution is different from others trying to solve the same problem.
- Create your team. Make sure you have the personnel that investors want to put time and money into. One investor told me the product is secondary and the team is his major deciding factor. Get experience, build a solid advisory team, and align skill sets to your business – no Uncle Rico’s guys because they work cheap!
- Focus product development on human-centered design. Usability, workflow, and task-oriented solutions are going to differentiate in the future. Even if you have a service offering, it needs to fit into the workflow of the users of that service. If you ask users to change too much, you will create resistance and pushback that you may not be able to overcome, even with a solid ROI.
- Build your MVP. Don’t build your solution, just build the basic solution that you can test and validate within the market. The further you go down the road with development, the more money you may have to throw away if it isn’t received well.
- Get clients. Pilot sites, partners, centers of excellence – call them what you will, but get users banging on the product so you can introduce the feedback and experience as proof points to investors. Otherwise, you are calling for investment into an idea; every product is just an idea until you have some users.
Finally, do you have access to independent angel investors? We all do. Go online and use www.angel.co, and you can find them. DO NOT start calling venture capital firms; they are going to be the second group that you contact after raising your seed round. Calling them too early wastes your time and theirs, and you will lose credibility with them. Make sure you don’t raise too much, and be sure you don’t raise too little. It’s the Red Riding Hood issue – it’s got to be just right! This is where good planning and strategy help a ton!
In the next post, I will share the 5 lessons I learned from MHVF (for Fitting into the Marketplace). Stay tuned!