I have successfully self funded my app using my student loan so I have taken a huge risk as I want to put it to good use. I know marketing is going to be crucial to get as much exposure as possible, I'm more worried about where to find an office space, hiring staff and seeking investment and in need of guidance. I am new to entrepreneurship and I was wondering if anyone can be of help?
Hi Jack. I would carefully re-consider getting into an office space, hiring staff or getting investors just yet. In most cases, you don't need office space until you really need office space or can definitely afford it. Get out and start meeting with people who need your app.
Try to get some pre-sales if possible. Over the past 15 years I ran founded and grew 2 startups. The most recent one grew to millions in revenue and NEVER had office space. I am not saying it isn't needed in some cases, but too many people make the mistake of wasting so much money on offices they don't need. Once you have an office then comes furniture then comes artwork then comes... then comes systems.
You can easily get first hires on a contract basis who work at home and use their own equipment to save critical money at startup.
Spend your money on what is utterly critical and ONLY that. You will know what you need when you need it. All of my employees worked from home too by the way... Again, not saying that works for everyone, but it worked great for me.
As far as investors, you don't want them until you have customers. You won't have any leverage without customers. Hold out as long as you can. The more customers you have without investment, the more leverage you have.
Plus most investors won't even consider investing in you without customers anyway....
Good luck. If you want to chat directly on LinkedIN I love helping new entrepreneurs, so feel free to hit me up.
Your worry is not as critical as you think it is.
If your tight on budget, your employee can work from home.
Secondly, you should focus more on user acquisition. Go and start building a list of people who would be using your app.
If you need help in acquiring users through Facebook, feel free to connect with me. :)
I would immediately put this project on hold and don't spend another penny on development until you have a line up of future customers standing and waiting to download and use it. Since you gave us no information about what the app is about, how much validation you have, and how much money you've invested, I assume that you have no idea what you're doing and are looking for some encouragement.
Spending more money at this point is like taking out a mortgage and buying a house for a family because you saw a pretty girl in your class last week, hoping she’ll say yes. In reality, most likely, she doesn’t even know you exist nor cares about you — this is the same reason 90% of startups fail. People build shit nobody wants and by the time they realize it, they’re out of pocket and out of time.
You should be talking to your customers. Instead of being the arrogant startup entrepreneur who assumes he knows what people want, be the smart entrepreneur and ask them what they want. Then build what they’re asking for. What you think you are solving might not even be a problem for them, and it’s hard to sell a solution to a problem only you say exists.
Until you have 1,000 people who are waiting in a virtual lineup to become your paying customers on the day of your launch, you are gambling with other people’s money on something that’s not proven.
I concur with many of the other answers.
In short - if you’ve proved problem / solution fit, then great! Identify the beachhead segment of your target market and test a couple of marketing channels to get some initial traction. (I recommend Traction by Weinberg & Mares)
However, I think you may have fallen into the trap many first time entrepreneurs fall into: building something with the blind hope you’re building something people need. First, you need to prove you can solve a big problem for your potential customers before you start spending money on development, marketing, staff, office space, etc.
Have a read my blog post for a 5min primer and handy infographic on entrepreneurship - it may save you a lot of time and money!!
Dealing with many important issues all at once can be a challenge. First word of advice, make a list, attack each one separately.
Second word of advice, validate your app with users. Take every value proposition and make sure it rings true with your target audience. This may be the best form of marketing for where you are right now, people are social and will talk about things they like.
Third, in terms of marketing, there are a lot of details missing to give you good advice. Who are your users? When are they online? How does your app solve their problem? You could go many different directions based on the answers to those questions.
Fourth, in terms of operating space, staff and capital, the best step you can take is put together a business plan. Project costs, understand your real capital needs, and use that to talk to investors. There are a lot of incubators / business development groups that can help you with each of these steps.
It very much depends on your target market but the key metric is CAC vs CLV (customer acquisition cost vs customer lifetime value). Unless the latter (adjusted for inflation / time-value of money) is greater than the former you don't have a viable business.
So how much does it cost to get a customer? And how much can you make from them? There are mechanisms to reduce CAC and increase CLV. I would be exploring those.
I wouldn't worry about office space or hiring unless you are getting significant traction or need it to attract paying customers. At most a shared working space would likely meet your needs - the key is to keep overheads as low as possible to maximise marketing budget. You will normally be better off using agencies and specialists until you are making progress.
In terms of investors - if you can demonstrate traction / market fit and good unit economics (CAC vs CLV) then you may be able to attract angel investors. If you are in the UK I would suggest you look at some of the campaigns on Seedrs to see the level of competition you are up against for seed stage funding (look at SEIS app raises).
Hope that helps
Don't create overhead until you know you can sell. Spend a few hundred dollars of ad spend to test the market on facebook. Here's a link to another cofounderslab post I made on this subject:
Jack - Your app is not making money yet. Be careful of spending money on unnecessary overheads and luxuries this early in the game, specifically since you still 100% dependent on your own funding.
An office and employees will cost money each month and add overhead regardless if your app is bringing in revenue yet or not. Unless you are very clever, marketing can be expensive. Speak to as many people in the industry as possible. Eg find an experienced freelancer or small agency with in startups and apps (i.e. they can show verifiable results). Then use that person a couple of hours per week until you can afford to appoint a full time resource. If you can negotiate pay for results, not for time. Start small, work from home if possible, or find a serviced start-up/ co-working space close to where you live where you can rent a desk (as opposed to having to pay for the whole office). Presumably you have your market research and business case all ready. Once you have a MVP and confirmation of interest from potential clients, external funding becomes a bit easier. VCs and investors wont beat your door down until you have traction and the business has been running profitably for a while.
Hey Jack, I'm about it with @Craig. You need no office right away. While app development is under process, you should strategies your marketing efforts.
Finding the ways to promote your app before launching, will really help people to get aware of it.
You can also give a boost to your app at the time of launching and post launch app.