We work with a lot of new ventures. Our goal is not only to help them distill ideas into digital products that users will love, but also to make them into successful businesses. In today’s climate this means raising money at the start.
Here are some product tips for VCs we think will help you move the needle in the right direction.
The hardest thing you’ll have to do is make it simple.
This goes without saying, but your users need value from your product the moment they open the app. The secret sauce here is a mixture of product, user experience (UX), and user interface (UI).
Using personas, or fictitious profiles, for your super users will help you understand them better. This also allows you to make decisions that will satisfy their needs and goals. If you satisfy those goals, make the experience repeatable. Give it a hook, and you’ll be well on your way to having a successful app. If you omit any of these, go back to the drawing board.
Make it feel exclusive.
Ever wonder why instagram did so well early in the days of photo sharing apps? Or why Dropbox bought mailbox in what seemed like next to no time? Both products were exclusive, they made people feel like insiders when they got in.
Instagram launched to a closed group of folks in the Valley, and they used the app with it’s unique hook. Sharing photos taken with the app on social media, they were instantaneously part of the in crowd. Everyone else wanted in as well.
What about Mailbox? The app had 750,000 people signed up to it before launch. The mailbox team stated that they did a timed release to deal with server load—maybe true—but more likely it was to build hype. People shared that they “finally” got into mailbox, letting their immediate network know they were a part of the hottest new thing.
Tell a story.
When you’re meeting with investors you’ll want to tell them that you’re in a 20 bajillion dollar market, growing at 5000% a year and you can grab 20% of it. Don’t do this. Tell a story instead.
Research out of a handful of business schools has shown that, contrary to popular belief, investors are not completely rational. Sure they’ll look at your credentials and scrutinize the team, but you’re selling them on your dream. The best way to communicate that dream is to tell a story around it.
For example, it you’re building a product that helps people tell their folks you’re thinking about them, frame the problem around a story. “We’re all really busy, we all work long hours and sometimes forget to write quick messages to our parents to let them know we’re thinking about them.
Well our app FriendPing sends quick notes to our loved ones, and says simple things like “hi, how are you?”, “Thinking about you?”, “Hows your week going?”. It does all the little good things we wish we had time to do, but forget to, and it does it automatically. When you get the app, you set up who you want to message, and then we do it on your behalf, making the recipient feel good knowing you’re thinking about them, and helping you seamlessly maintain those important communications with the people you care about.”
Now, I’m not saying build this product, but look at the story, it’s framed around a problem the other person can identify with.
Don’t wait. There’s no substitute for real data. Get a group or people to beta test your app from your network, and run quick feedback loops. Get them to tell you what they like / dislike about the app, what could be improved upon.
Do this early in the development process, the app doesn’t have to be launch ready, it just has to work. This will allow you to test your hooks, viral loops, and product features refining your product before launch, and before presenting it to potential investors. So when that pitch comes you’ll be able to give the app to someone and instead of walking them through the concept, you’ll have them asking you to get the app instead.
Everything is personal connection in Product Tips for VCs attention.
Many first time entrepreneurs will do one of the following, they’ll blind email VCs hoping to get their deck in front of them. This usually results in you wasting your time, and your deck along with your email getting deleted or archived, or they’ll go to events hoping to network with a VC. While Associates at VC can be great for getting you in front of a partner, a lot of the people you see at events are community outreach / ambassadors for VCs and have little sway in getting you in front of the right people. Spend your time more wisely, in who you target, and how you target them.
Build a database of the VCs that will be a good fit for your company, then identify the companies they invested in that are local to you. I.e. Quotidian Ventures is in NYC, and they invested in Admitted.ly an ed-tech company, I’m an ed-tech company, so they may be a good fit. Then go out and find the founders of those companies, build relationships, and ask for intros. Hands down the best intro to a VC is from a founder. VC to VC intros on the other hand can have a downside, especially when the referring VC passed on you, which will instantaneously bring up the question, “Why did VC A pass on this startup.” Be meticulous, be smart.
For more tips and tricks of the industry, check out our thoughts here.