Business Development · Business Strategy

Question from 1st time Entrepreneur: What would you do in this scenario?

Abhinab Mitra --

Last updated on April 11th, 2017

Hi everyone, I am grateful for this wonderful site. Some great knowledge here. I wanted to share with you my situation and request some advice. I will need to share some important details before I post the question to get better answers from you. So kindly bear with me.


I am a VFX & Animation artist with 4 years of experience and also a Masters education background in the same. I am not an entrepreneur and have no MBA background or the like. In 2015 while job hunting I came across an idea of web-based startup for the industry's recruitment procedure that could serve the industry very well due to its contract-based nature. My concept is neither like LinkedIn nor like Upwork.


Next, I created detailed print-screen like mockups of the site, features, user flow etc. I then decided to contact the Senior HR managers, Recruiters and the likes at around 10 VFX studios for feedback. I had received detailed feedback from global heads of recruitment at some of the premier studios, 3 programme leaders at leading Animation colleges / Universities, 2 industry veterans who have various VFX book publications to their names that are taught at the Universities, as well as a few VFX supervisors who have supervised on oscar-winning films (literally speaking).


I also created a quick anonymous survey giving a brief description of what the site will do. I reached out to two renowned Animation Universities in Canada and UK to help forward my survey to their batches of ex-students who were now working in the industry. I received a 100 responses. 70% said Yes they would use it, 30% said I Don't Know, and 0% said No. 83% left us their emails to be notified upon launch. 31% respondents were middle-weight artists and 17% were Senior.


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Now, I live in India and am a non-tech founder. Since I have a UK degree, I am eligible for the 1 year Graduate Entrepreneur visa endorsed by a recognised Uni to launch my startup in UK. London is still the hub of VFX and post-production. And I would love physical proximity to the target market. Especially during early phases where feedback and reiteration to product are important. The awareness about this industry is still extremely low in India, especially in my city.

The goal of this visa is to let graduates have a go at their ideas. So no funding is required unlike the formal Tier 1 Entrepreneur visa. Although this 1 year visa can be extended by 1 more year, ultimate goal is to raise a minimum Funding of £50k from FCA recognised firm and switch to formal Tier 1 visa.


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I have around $12k at the moment that I want to use for this startup.


Last thing, there is a scope for API integration with an application tracking software company used in-house by majority of vfx, games and animation companies. That company has also successfully raised Series C. I talked with their business partnership head and they said they would be happy to work with our developers to develop a special API, and also share their post-production industry customers with us, for a 20% revenue share.


If we were to consider Only the market for Online recruitment in the VFX industry in English-speaking countries, the figure for SOM would be around $XX Million (on the lower end of 2 digits).


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QUESTION: So although I have my clear business plan about how I want to go about this, I want to ask you what would you do if you were landing in the UK with $12k, 1 year on visa and No team at all. You are a non-tech founder. You would have a year to launch startup and raise £50k to be able to switch to main entrepreneur visa. If endorsing University feels you are progressing well, it could extend your visa by another year but no more. Target industry is Niche and your startup uses pre-existing technology. A competitor in same industry who has model that is 30% similar to yours has raised $1M. Demand for great coders and post-production artists is about to increase with VR and VR Cinema around the corner. Industry is resistant to automation due to its creative nature.


Appreciate your time! Thank you.

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Mohib Hassan Founder at Stealth Insuretech Startup

April 11th, 2017

I would invest that 12k into building a mock product and a product video. Also use some of that money to gather information and try to prove your hypothesis for this product.


Armed with this information you should be able to raise a seed round to build your product and team.


In the meanwhile try to get a technical cofounder. In my experience single cofounders find it next to impossible to raise capital fast.


If you're able to secure the capital and maybe get into an accelerator the visa should be easy to get.


Abhinab Mitra --

April 11th, 2017

@ John Lombard, thank you I will check them out.


@ 5*Agents: Thank you. But I am talking about Graduate Entrepreneur visa, not Entrepreneur visa. Tier 1 has 3 visas, these two and Exceptional Talent.


@ Mohib Hassan, Thank you very much, really appreciate it. I have noted your advice.

David Maguire Colorist/Online Editor at Renegade 83, Inc

April 11th, 2017

Since you're in/from India I would start by finding a really great local company that can do your programming. The cost to develop my app in the US was too high for me to get a working version 1 so I hired a company in India with a local office here in California. I assume that the cost will also be high in England so unless you're able to raise a lot of cash right away than money matters at this stage.


Also, be very careful when dealing with investors of any sort. They may like your idea but fundamentally they are money people and their bottomline is return on investment. Don't mistake their excitement or interest as kindred with yours. To protect their money they will exert control over your company even if they have a minority stake. Know what you're getting into before you get in too deep.


You obviously know your way around programs so I would not spend money on having someone else make a working prototype when you're probably capable of learning a web building app and making your own demo. Sounds like you already have the artwork and functionality done.


Finally, I have two friends/entrepreneurs who started successful business much like yours (one is for actors and the other is for tv editors) and they simply started out being the conduit between the freelancers and the companies via emails (theirs also grew out of an idea and a need). If a company was looking for someone they contacted my friend who then sent out emails to their contact lists. If a freelancer was looking for something then they sent a request which was passed on to a prospective business. Eventually they grew this simple system into a website and a full time business that generated revenue.


I'm not saying this is the way to go for you but the key to their business - and yours - is having strong, viable contacts on both sides of the equation. Think about offering your service on a email basis and see what sort of traffic/numbers you get. Not only will you get some 'real world' metrics but you'll be solidifying your position in your demographic so even if competition comes along you'll have working relationships and brand loyalty.


Best of luck!

Dan Light Farther faster with Dan Light Consulting

April 11th, 2017

Learn to get to the point. Regards, Dan Light, MBA Certified Scrum Product Owner Evernote Certified Consultant Dan Light Consulting dan@danlightdirect.com http://www.danlightdirect.com 540.219.0001 http://www.linkedin.com/in/danlight http://www.facebook.com/DLCon http://www.twitter.com/danlightconsult http://www.google.com/+DanLightDirect

John Lombard Canadian entrepreneur in China since 1993

April 11th, 2017

I'd suggest that you contact Hackers/Founders (http://hf.cx). They have all sorts of resources and networks to help people like you, and have locations all over the world.

5 * Agents for a TV Channel Franchise

April 11th, 2017

We sponsor the U.K. Governments Entrepreneurs Visa. but unfortunately you have the wrong information. Itwill cost a lot more that £50k. Its a points system and 90 points are required. For 25 points you need to invest £200,000 in a U.K Companies shares. Another 25 points for banking another £200k in a U.K Building Society,another 25 points can be earned by enlisting in a U.K Company as a Director,and 25 points for becoming a Consultant for that Company.

David Maguire Colorist/Online Editor at Renegade 83, Inc

April 12th, 2017

Abhinab Mitra -- If you don't get a professional and satisfying response from a company - after they tell you a 2-3 day turn around - then you don't want to work with them. I believe that finding people to work with - whether you're paying them or partnering with them - is like dating and marriage. If you're mutually into each other than great, but if it's one-sided then move on. Getting married (signing those partnership/equity papers) is the real deal. You're in this thing for the long haul and your company (the child in this story) is going to get royally screwed if it's the wrong relationship.


The dev company that's excited about your product, and is interested in equity to lower upfront costs, sounds very interesting. Just make sure that they're not in the habit of simply collecting equity from a bunch of companies with the hope of one giving them a windfall from the founders hard work. If you believe that they will be true sweat-equity partners then I'd go that direction (I might be interested in talking to them myself). Regardless, make sure that all stock ownership is vested. Don't give any percentage/stock in your company without conditions of time involved and significant participation in making the company a financial success. The worst thing you can do is have a bunch of deadbeat partners controlling stock that can hinder getting future investors involved.


I'm going though the process of bringing on co-founders and always preface that all deals need to be made in the best interest of the company - not me, the company. Again, think of the company as a child and how you have to look after its best interest today so it will have a happy, prosperous, and long life. Screw it up today and your kid's scarred for life (or worse).


As for the company with India programmers, I can get you their info but I don't know if you'd get a better price than the ones you've already found. They are more responsive though. My app would have cost more than $100k in the US but I'm paying about a third of that with this company. I also did all the UI design which saved me a lot of money and time. We're in beta right now and looking to launch in the next month or so. Marketing is my big issues now - yippie!


All the best.

parthi

Last updated on April 11th, 2017

I could help with lean startup

Abhinab Mitra --

April 12th, 2017

@ David: Many thanks for such a helpful and insightful answer. I will surely keep in mind what you said about investors. And it is amazing to learn how your two friends managed to launch successful startups.


Recently I researched some good dev companies in Bangalore and came across one who had worked on products of quite some well known Indian startups. It took 3 emails for them to respond to me, another week to schedule skype. Before skype we signed NDA and they requested I send them the wireframes so that they could send a quote in next 2-3 days. It took them 3 weeks to send a quote after I sent a follow-up email. They quoted $20k for full product dev, Not MVP.


On other hand I contacted quite a few startup studios in London. Most quoted GBP 2k for interative prototypes and $10k for MVP. Not to mention quick and professional correspondence. One studio started by seasoned entrepreneurs quoted 50k for full product dev, and 30k if they could become partners for 15% equity. But that would include branding for free, and they would participate in fundraising process, introduce to their contacts, etc. One of them is also a mentor at prominent startup accelerators in London. But quotes aside, I could actually feel enthusiam in them for what I wanted to do. We had multiple skype calls, detailed sessions. They send me a great proposal and also recommended some virality features, that I had not thought of.


They also sent me a link to article which explains step by step how to register and launch company in UK.


I have worked in the west and I'm used to very quick correspondence. I don't want lazy correspondence at a time when communication is key during early dev and early adopter process.


Those who are in same boat as me, check out the case of NoMoreFiling. They made an interactive demo of app for 4k (outsourced), got 200 survey respondents and used that to raise 50k on Seedrs to be able to make MVP.

Abhinab Mitra --

April 12th, 2017

And any thoughts on this:


" there is a scope for API integration with an application tracking software company used in-house by majority of vfx, games and animation companies. That company has also successfully raised Series C. I talked with their business partnership head and they said they would be happy to work with our developers to develop a special API, and also share their post-production industry customers with us, for a 20% revenue share. "