How to Fund Your Startup Faster by Prototyping Your Idea

So you think you’ve discovered the next Uber or AirBnB and now you have to build it.
In today’s market, a great idea is not enough. How can you be sure your concept works and people will pay for it? As 75% of venture-backed startups fail, you need to do your research. You need a way to validate your idea to investors, prove that there’s a market for it and assess its monetary value.
Prototyping helps to deliver a working model of your innovation to bring it to life. It gives you a tangible way to project its potential and help stakeholders understand it’s worth.

Prove That It Works

This is the number one risk to the success of your startup. Your idea should not exist in your mind alone. A working prototype will work as proof if your idea will or won’t work. It is an interactive, working model of the end product. Building a prototype gives you the ability to communicate your idea easier. You can see how it functions, visualise the design and layout, and discover errors early on. This is the first step to help achieve buy-in and attract investors.

Fix It If It Doesn’t

But maybe your idea hasn’t gone to plan. Prototyping allows you to identify problems early on before making a massive investment. Testing the prototype helps to trigger new ideas to make your product even better. Alternatively, your idea might need to pivot in another direction that you hadn’t originally considered.
Take Twitter for example. One of the Tech Industries most successful pivots. It started off as Odeo, a podcasting company. Jack Dorsey, one of Odeo’s engineers, had developed a messaging service that allowed instant updates. The company founder gave back $5 million in seed capital he had raised to his investors, and Twttr (vowels were added later) was started.
The most important part of this stage is to drill deep into the problem you are solving and if your solving that problem in a way that appeals to your target audience.

Show People Want to Pay for It

Now that your prototype is built it is time to test. Testing is the most important step in the prototyping process as it will help you to prove whether:

1. It is something your target market needs, and;
2. It is something your target market will pay for.

Why is this step so important? Take a look at this article by Fortune. They report the “top reason” that startups fail is because “They make products that have no market need.”
At the end of the day, your audience will drive your decisions. Trial your prototype with users and potential customers to assess its value and use their feedback to refine it.

Prototype Everything

Evaluating your customers through prototyping has two main benefits. It is a low-risk way to validate your technology solution. It also speeds up your go-to market timeline, delivering value to the market sooner. Prototyping can even be used as a great way to test your business model and value proposition.

Take Strategyzer and their Value Proposition Canvas. This is a perfect example of how to use basic prototyping to understand your customer needs. Their canvas uses sticky notes and brainstorming to understand what jobs your customer needs to be done, the pains you’re relieving and the gains you’re creating.
By doing this type of market research you can gauge the answers to the important questions such as:

• Does it save them time, money or effort?
• What challenges are they currently facing that your solution could relieve?
• What needs are you satisfying or job are you helping them to complete?

Demonstrate It Is Marketable on Launch

Now you’ve got a good understanding of your market. Creating a working prototype has helped to prove that the answers to those questions were right and you have built a loyal audience. Your idea is now generating interest and your investors are keen to see how it will hit the ground running.
They will be impressed that you’ve developed a marketable strategy from the in-depth research you’ve done on your target audience. You’ll also be able to show that you can get your solution to the market quicker.

Never Stop Prototyping

Technology is the fastest changing industry there is. It is why innovating and testing your ideas is so important. In the tech industry, it has become almost the standard to focus on creating a Minimum Viable Product (MVP) to start delivering value to your customer sooner.
Prototyping new ideas means you’re able to stay ahead of your competition and create more value for your customers. This is because you’re listening to what they want and not wasting time building features or products that they don’t.
The Lean Startup methodology provides an approach to creating and managing startups to get a desired product to customers’ hands faster. By using a rapid prototyping model the Lean Startup answers the questions:

• “Should this product be built?” and;
• “Can we build a sustainable business around this set of products and services?

This experiment is more than just theoretical inquiry; it is the first product. The main goal of this methodology is that by the time the product is ready to be widely distributed, it will already have established customers.
If you’re not convinced by the idea of rapid prototyping take the example of Dropbox.By applying the Lean Startup principles, Dropbox went form 100,000 registered users to over 4,000,000 in just 15 months.
If you’re ready to start prototyping, contact our team today!

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Sally Yau

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