Thanks for coming to Software CEO for advice. Lots of experience with the moderators and members!
Now, you did say consumer electronics, vs. software product, but quite frankly there are some key things needed by either of these types of companies.
You ask about documents and templates... and you say that you started a marketing plan and requirements specification and concept art, too. What I didn't hear is that you have identified a specific consumer need / desire (through market / consumer research), nor that you have performed prospect research to determine the value they'd place on this solution / thing.
I would start there.
I could go (way) on. But I suspect others will have something to say about this - and I'll rejoin after hearing from some others.
PS: Check out a few of this thread:
"Market assessment, first"
Categories: Strategy and Leadership
I'm interested in starting a consumer electronics company. I understand the requirements of establishing a new venture, having already done so six years ago; however, the company I previously founded provides services. I'm not sure what I need to know from an entrepreneur's perspective for starting a products company.
I'm presently working on the business and marketing plans in addition to the software requirements specification and concept art for the planned flagship product. What other documents, as well as IEEE/ISO standards, should I use to prepare for pitching the flagship product to prospective investors? Do you have any templates for those documents? I'm also interested in any further advice you can offer.
What other documents, as well as IEEE/ISO standards, should I use to prepare for pitching the flagship product to prospective investors? Do you have any templates for those documents? I'm also interested in any further advice you can offer.If you are creating a document to pitch to investors, I don't see the need for getting into IEEE/ISO standards. Of all the things you can write/talk about ... why this?
If this is a prospectus, and you've done this before, then one for software will not be much different to others IMO in terms of structure.
The key differenece with software and technology is understanding how you can gain, and then later sustain competive advantage. One of the challenges with software, its very easy to replicate what you are doing, espescially if someoe else has deeper pockets.
All technology goes through a lifecycle, and your market strategies will vary depending upon wether you are entering an entirely new, growing or mature market. You need to develop your strategy along those lines. Are you going to be a niche player, or planning to start a new category, etc.... this all needs to be figured out.
Goint back to what Mark has said, have you done all the marketing due diligence? That's propbably the best thing you can do: a deep understanding of the marketplace you plan to sell to, and the competitors who play in that sandbox, as well as identifying who your customers will be and why they will buy from you.
If you want a good approach/ideas prior to talking intestors, read Guy Kawasaki's Art of the Start. It gives you a pretty good high level view on how to approach a new technology start-up. If you don't have a technical background, talk to some people at a senior level who have managed software devlopment. They will best guide you on the components, platform and likely effort required. Don't try to wing this yourself, unless you are thoroughly comfortable with this.
I need to ... develop just enough of a concept, even on paper with only art to help visualize the product, to pitch the venture to prospective investors and hires. Am I right thinking in this direction? / Then I can start recruiting the initial members of the team to develop a working prototype that can be used for market testing
Quick gut-feel response: Sort of. Sort of not. Good thinking on the paper-first. But focus on the market (assessment), then funding (if needed).
Additional questions / thoughts:
==> Do you know that it is even "VC-able"? Does it meet their criteria (for [proven market size], growth, IPO-able, etc.)?
==> If you went to a VC with Letters of Intent that have been signed by 10 potential channel partners - because *they* see the value in it instead of product art, then the probability is MUCH higher that they would be interested. Main reason... your competition (for VC funding) isn't another consumer electronics company, it is someone who has some proof-points in the market. EVERYone else comes to them with an intense focus on the product.
==> You do *not* need a working prototype to perform market research. This is one of the biggest mistakes I see. It is far more cost-effective, and customer-aligned to perform market (& customer[!]) research before designing anything! Chances are very high that they will give you feedback that will help you focus on those design elements (i.e., requirements) that they will pay more for, and help you avoid those design elements that they do not value - yet would cost you $s to develop. That way - you will reduce required in vestment, while boosting your future revenue & gross margin!
There are ways to do this without prototypes to help guide your product and company strategies. THEN when you develop a prototype, you'll have leap-frogged some costly design / market iteration, and can speed to market faster than you would have. Seems counter-intuitive, but I've been down both roads, and it comes out WAY better!
Just my two cents.
You really need to think hard about your "investors".
Who will they be?
Few VC's put money in at initial stage. They would like, as a minimum, proof of concept. So don't gear your pitch or planning to that audience as yet, unless you have some contacts here already who can open doors for you.
Angels and private intestors? Its more of a personal sale ... their confidence in your abilities to pull it off. I would focus on specific short-term deliverables to get you to a certain stage (ready for VC) as well as a long-term vision.
I still am not sure what you are trying to figure out though. If you've been through this once before, then you should know how to put together an investment prospectus and business plan.
That's a tough one, because I have no experience in the consumer electronics realm.
Certainly in software, a prototype helps a lot, way more than detailed specs. Is that possible with what you have in mind?
For example, showing on a PC the expected prouduct UI and behaviours that you would eventually see on a dedicated device. This can be done via simple UI prototyping.
The closer, you are able to help others "visualize" then end product, the better off you would be.
I would also suggest you define a functional scope for the software side: identifying what the software will enable the device to do or not do. Break this down as if you are marketing the end feature set of your product.
Technically, you need to address some of the mechanics: embedded OS, will the logic be embedded in a chipset or a small drive will be needed.
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