16 Sep 2016
Make your Ideas come to Life
Do you have an idea for an app or webapp but not the opportunity to build it yourself? This article will discuss both different types of cooperation, as well as what might be good to consider when you want to make your ideas come to life.
We often get asked to start projects with innovators. One project we have chosen to get involved in is Meipso, a company that offers online personality tests. Read more about Meipso on our blog (note that the article is in Swedish), and don’t forget to sign up for launch this Autumn.
Challengera is another cooperation project. The company began as a startup about four years ago, and are now attracting customers such as Atlas Copco, General Electric, Citroën and Peugeot. Read more about how we’ve managed to increase Challengera’s value through developing their platform and online presence.
Finding the right partner
Finding the right partner for a project that is very close to heart is not always a simple task. The reason for having to add a partner in the project is often based on the need to supplement with certain skills that are otherwise missing. One of the challenges is therefore to assess and evaluate skills and competences that oneself lack.
Apart from making sure that the educational background and work experience seems reasonable in relation to the work to be performed, we recommend to meet the new partner face to face at least once before you decide to start working together.
That the so-called personal chemistry works in the team is of the utmost importance in a project that involves a much greater financial risk compared to ordinary projects. We will discuss why this type of project involves a greater financial risk further in a later section.
The first common mistake
Most begin by asking acquaintances, relatives, post requests on social networks or publish ads on web portals for freelance jobs. A common mistake many people make when seeking development partners is the way the help needed is described in relation to the general project description.
If the project is described as revolutionary requiring expert knowledge from over a dozen areas of expertise, it does not make sense to describe the process of building it as “relatively simple”. (Which is sometimes done in the hope of making the work cheaper.)
To describe the development of a fantastic idea as “simple” gives the impression that the work building it is not valued very highly, and who wants to put in a lot of unappreciated work in a risky project?
Avoid opinionated expressions about the work complexity.
The second most common mistake
To estimate the time and price of the unfamiliar and uncharted is difficult. Sometimes it is easy to become a little too hopeful when it comes to estimating the efforts required to build a particular service, app or web site.
A tip to get a general idea of the resources required to make an idea come to life is to examine existing competitors or companies with similar services or products. What does their turnover look like, how many employees do they have, how is the organization distributed in terms of, for example, finance, marketing and development? Then try to position your idea and project, based on these facts.
If it is not possible to procure as much resources as your competitors, consider various other ways to differentiate the product.
Once you have a grasp of approximately how much it costs to produce the idea, it becomes much easier to make an estimate of the compensation for developing the product.
In most projects of this type, there is initially no or very little financial means. The compensation offered is therefore composed mainly of a smaller payment along with percentage shares in the company. Generally speaking, a small payment usually means a larger percentage share, and vice versa.
Why developers hesitate
As remuneration for work done is very dependent on how much the shares in the company will be worth in the future, there is always a risk that the work will never get paid. Since time has to be allocated to each project, there is also the risk of having to turn down other opportunities that might have resulted in a (better) profit.
In short, there are many dangers and risks for developers to consider before going in as a partner in a project that offers only possible future payments. In order to consider going into the project, the possible future payment has to be attractive enough and not at least appear reasonable to achieve through a successful project.
Avoid promising the moon without simultaneously offering reasonable compensation for the work to be performed. Promises of retrospective payments once the service or product has taken the world by storm is not a valid substitute.
Division of labor
In addition to the development of the idea, a lot of other work is needed for the project to succeed. It is a great advantage if you already have a strategy around how and who will manage the marketing and sales efforts.
It is also very good if there is a plan for who will be responsible for the administrative parts of the project – for example, setting up the company, be responsible for contracts and agreements, arrange bank accounts and manage the ongoing administrative and economic work.
Finally, it is also wise to consider the further development of the project after it has been launched. For example, it might be possible to build a first version of the idea with very limited resources, and then build more after a little while when the product has generated some revenue.
Do you have an idea for the next big thing?
Get in touch, present yourself and tell us about your vision.