Founding Partner of Startups.com platform | Clarity.fm, Launchrock, Fundable, Zirtual, Zana, Bizplan, and KillerStartups. 15 years as a Founder, Advisor, Mentor, Investor - the quintessential start-up guerrilla. I have the pleasure of working with 100's of the best start-ups every year on everything from ideation, early concept validation, launching, funding, and all areas of operations. I love getting my hands dirty - and lead teams of talented consultants, writers, analysts, and marketers who love a challenge. I've lived all over the World - and started businesses on 3 continents. I'm back in the US - for now.
Over analysis occurs when you don't have a clear objective behind your research, or when you haven't clearly defined your pass/fail metrics.
Before you start your analysis you should have a clear idea of what makes a good location and what doesn't. Then, do as much analysis as is required to satisfy that it is or is not. Research of this nature should not be open ended.
I'm happy to chat through how to define the pass/fail criteria and setup the go/no go logic.
Over the years I have been asked many variants of this question, and the answer is almost always “yes, you can”, so what we prefer to dig in on is the “why should you”.
There tend to be three scenarios where people ask this question:
1. A prior campaign failed and the founders want to try again.
2. A prior campaign succeeded and the founders want to repeat it.
3. The founders want to launch on more than one platform at the same time in an attempt to gain more exposure.
In the case of a failed attempt - there is nothing wrong with making a second attempt, as long as you’ve pinpointed where things went wrong the first time and are prepared to overcome those hurdles. The most common reasons for failure are:
-Not building an audience prior to launch
-Not marketing the raise sufficiently
-Product / Market Fit is off
Assuming you are ready to address the shortfalls in your first attempt there is no reason that you shouldn’t make another attempt.
If you’ve run a campaign successfully, there are a number of reasons you may want to roll the dice again, including:
-We didn’t make enough money to create operational cash for our business.
-We made money on it, and we want to make more.
-We saw additional demand for the product after the campaign ended.
If you were successful, but the money you raised was just enough to cover making and shipping all the product you sold, then you may be tempted to do it again. If that’s the case, ensure that you’ve achieved a better manufacturing cost, raised prices, or done something to increase the margins on the second attempt or you’ll find yourself in the same position.
If you did well, and simply want to repeat the process, consider using e-commerce rather than crowdfunding and start building your own store, instead of building on rented land (ie someone else’s platform). In this was all your marketing is pointed to your own site, giving you more control and the ability to add products over time, change pricing, etc.
The same would apply if you saw a great deal of demand after the campaign ended. Quickly move to capture those potential buyers emails and find a solution for transacting.
More than one platform
I’m often asked if it is “okay” to launch on more than one crowdfunding platform at a time, with the hopes of getting more exposure. The answer is yes, it’s okay, but you aren’t likely to get the exposure you are looking for, and in fact will be more likely to fail on both platforms.
This comes down to a simple principle of division of attention, and understanding how crowdfunding platforms provide exposure.
If you are forced to divide your marketing efforts across two platforms, you exponentially increase the difficulty of driving enough traffic to hit your goals and have a successful raise.
Counting on the platform for exposure is also a major mistake people make. While it is true that the platforms will surface and promote a handful of the hundreds, or thousands of projects on their platform, they tend to focus on those that are already showing traction and success. Said differently, if you plan was to launch on a platform (or two) and have all the exposure come from their efforts, you don’t actually have a plan.
Yes, you can run a project twice, sequentially or in parallel - but you should strongly consider the why, and whether or not a second raise will help you achieve the outcomes you are really after.
SOM refers to the portion of the market that your business COULD actually capture, as you stated: "[the] % [you] can realistically achieve from the SAM."
Let's use an analogy to break this down - and pretend you are talking about fishing instead of project management software.
TAM refers to all the fish (that manage projects) in the sea. SAM are all the fish (that manage projects) within casting range of the dock you fish from (ie your solution is viable for them). SOM are the number of fish (that manage projects) you can reasonably catch within the amounts of time, energy, and bait you can allocate to fishing.
The question within a question you ask about guidelines on believability is a great one. And, while I don't have a guideline or benchmark to share, I can confirm your instinct; ensuring that your projected SOM is reasonable is absolutely critical.
The best way to project this is by having at least some of the equation variables grounded in reality - ie, actually catching some fish. If you can show how much it costs to acquire a customer, how much it costs to service that customer, and how much you'll make from that customer over a lifetime, you've got some great empirical evidence to show how you'll achieve growth within your SOM.
I don't think of SOM as a target - it is rather the theoretical maximum number of customers or revenue I can achieve within the (sub)universe where my product or service adds value.
In the end - the number is important - but not as important as how you present it, and how you'll approach it with your product.
As an investor, you want to see more than just the answer - you want the thought process behind the answer. Was the founder thoughtful in their approach, did they look beyond the obvious while remaining pragmatic? Do they understand clearly why the SAM (macro-environment) and SOM (micro-environment) break out of the TAM in the proportions they've listed?
More than happy to dive deeper on this.
What a great problem to have, and an awesome question for Clarity Experts.
My brief take is as follows:
1. I agree that direct relevancy doesn't exist between their information needs and your tax returns
2. They will definitely be looking at the value they'll leverage from ownership - not its net present value to you, and will base their internal value (ie what they'd pay for it) on that.
3. The P&L will be more useful to them - but may be superfluous info (they've been paying you for leads that they know are at a markup - so there is obviously margin to be gained).
That said - you can do both. Not giving them what they ask for might create conflict or impasse.
At the end of the day, it will come down to you both agreeing on a value - one that feels good for you - and works within their economic situation.
Bear in mind a few things - selling a business isn't a decision in a vacuum - you're in a market, and there are likely alternatives. Also, as you attempt to determine an empirical value - obviously maximizing the price in your favor, you should not lose sight of the value to you of any offer - ie, if you currently net $100K, and they offered $400K would that be a better value that continuing the business for 4 years to generate the same cash.
Empirical value is okay for setting a starting point - but in the end - you're going to have to negotiate to a point of agreement.
You can provide them what they want - and present your take on the value to them, but ultimately THEY know what those leads are worth, and may have plans beyond what is obvious to you - ie, even your rosy empirical value may fall short of what they'd be willing to pay.
So, if I'm in your chair - I'm thinking long and hard about what I want out of it - I'm presenting a starting point that feels reasonable, and I'm working to land as close to that as I can.
I'm in no position to advise on the cost of a Tinder-like app - having never used it myself.
I can however share some thoughts on Freemium.
Freemium is too often engaged because it is easy - not because it is right for the business. You'll still need to determine how'll you make money, even with freemium, so it isn't an escape hatch from figuring out monetization - knowing how you'll make money from the beginning is critical.
Check out this video by Dan Martell: http://www.danmartell.com/4rulestofreemium/
I'll summarize the decision points around freemium below:
1. There are 10M+ users in your market. 2. Free distribution will give you a competitive advantage. 3. You have a simple value proposition and process. 4. The marginal cost to service additional customers is near or equal to zero.
Keep asking great questions and focusing on fixing the issues and you'll get there! Video needs some innovation to become more accessible - you're on an interesting path!
Upon visiting the site - I'm not surprised that this is an issue. You are doing very little to illustrate how your product delivers value - and oddly, there is no explainer video - which for a company that produces marketing video, seems like not only an obvious move, but a requirement.
You need to go beyond benefits and talk about the value, but also tie it to how you create it.
Not suggesting any of the below as actual copy - just illustrating:
"The marketing value of video is huge - but producing video is time consuming and expensive. We've made it easy by producing the video for you - all you have to do is pick the one you want, add text, a logo, and your call-to-action and you've got a ready-to-upload video in minutes."
I'm sure you can improve upon the wording - and I may be off on exactly how it works (since we've agreed that the site isn't telling us that) - but I think you can greatly improve conversion and interest in the product with something similar.
If you'd like to walk me through the product I'd be happy to provide more specific feedback once armed with the facts.
Conversion at the page level is often impacted by who is showing up - and could be indicative of a mismatch between the ads you are running, the audience they attract, and the messaging on the landing page on arrival.
You're also asking for both a phone number and an email address - while offering very little information in return - like what cities this is available in - what it costs - how long it takes, how it's different / better than other services in this same vein.
Consider narrowing the focus of your ads down to a single city, and then customize the lander to include challenges specific to that city that this would eliminate (the long Saturday lines at XYZ Market - traffic on the crosstown etc) and reference brands and stores they'll know. The more you can make the landing page a reflection of your user and the problem you're hoping to solve for them - the better. Right now, it's not reflective at all - leaving most details to the imagination.
Once you've dialed in on the approach in a single locale, you can expand your campaign by repeating the process (still customizing per market).
I hope this helps.
Side Note: I would have loved to have done this for my wife's wedding bouquet - and even more recently for the flowers my daughters carried as flower girls in a dear friend's wedding. Very cool concept!
People are far more likely to believe what they can see. Produce a short video that shows your process - from start to finish - so they can see the magic happen. It can be quick clips of each stage showing the exciting moments (like putting the flowers in, and sealing the glass). This doesn't need to be (and probably shouldn't be) more than 30 seconds.
Scene 1 - We take amazing flowers (3-5 seconds)
Scene 2 - and preserve them by "xyz" (10-15 seconds)
Scene 3 - and seal them in glass to keep them beautiful forever. (10 to 15 seconds).
Hope that helps!
This may sound overly simplistic - but I'd suggest just asking a few. Assuming you want to find someone local that you can work on site with - just seek out a dozen or so and ask them. If an individual says no, ask them who else you should ask in the area.
They shouldn't be hard to find. Said differently, if they are - they probably aren't busy.