Forums: Discussions for entrepreneurs and small business.

It was totally a bad idea to post such a long writing trying to explain the whole concept behind my software idea. I think I made it boring and confusing at the same time and stressed too much on common sense stuff.
I try to make it simple this time:
I am planning to produce a software program that gathers statistical and transactional information from different communication platforms in an organization (phone system, fax server, electronic messaging, IM, ...) and stores in a database. The software logic will then blend the data and generates various reports that show how users have utilized “communication systems” which is an indication of their productivity.
Am I making some sense now?


Katherine: I’m not sure I follow what you mean.

Investors want some point of reference as to how similar products have done, even if not the exact product.  When the people working on my plan discussed financials, they said part of it is looking at what is similar, what the price is, what the success rate is and then calulating your price and target minimum audience, revenues etc.. in comparison to that as the reference point.

I read through pretty much all of the posts so far because I wanted to make sure that I wasn`t repeating anything.  You`ve gotten very good advice so far.

Here are a few thoughts to add to the mix:

You might be looking for angel capital rather than VC capital to keep you floating for the time being.  As has been mentioned VCs are going to want to see real evidence of market demand.  Sales.  Y`know how it is - when you don`t NEED the money that`s when they`re willing to provide it.   Angel capital will be in smaller amounts but it still can be incredibly helpful and angels are more willing to take a chance on an unproven idea (at least unproven with regard to market demand and sales).

Okay on to market research.  In the "marketing" forum there was a thread about marketing research that I replied to last night.  I don`t want to repeat myself here - so just go to:

http://www.startupnation.com/pages/community/forum_posts.asp ?TID=4321&PN=1&TPN=2 to learn about a helpful tool for online market research that does a great job and is super inexpensive to implement.

Okay - now regarding the challenge of driving people to actually DO an online study. You said in one of these posts that you`ve been able to get articles in professional trade pubs - how about getting an article published about the problem your product serves and then refer those people to your market research questionnaire?

The good thing about this is that not only do you get responses to your questionnaire but you`ll also start to build marketing "buzz" for your product when it is released and as you capture contact info you`ll create a list of people who may be positively pre-disposed to buying your product because they`ve identified themselves as the people who indeed have that challenge - whatever it is - that you`re software app solves.

Hope this is helpful and an idea that you`re able to use.

All the best,

Denise Michaels, Author, "Testosterone-Free Marketing"

Thanks for your reply Denise,
I checked out the link which was added to my bookmarks right away. I am in process of finishing the financial provisions of the business plan and will get to the questionnaire right after that.
You mentioned VC and angel investors and I have came across these options on most the posts here with regards to getting start up funds but not much talk about bank loans and SBA programs. Are the latter options less likely to be helpful or any critical risks in them? From the day I decided to produce this application, I thought getting a bank loan or participate the one of the SBA programs will the way to go.
Help me out with this as I’m sort of lost.

The truth is I`ve never applied for a business loan.  Since my business is service oriented in nature - well, I sell some products too - I`ve always bootstrapped it. 

Seems to me there are risks inherent in any kind of funding.  But there are risks in not getting funding, too.  What an influx of cash will give you is the opportunity to build faster momentum - and that`s a very good thing. 

For the person giving you money he`s going to look at the risk-reward relationship.  I think whenever you go to someone asking for money or a sale you should ask yourself - what are his "hot buttons?"  What is he interested in?

I think VC money is much more common in high-tech situations however it might be at a higher interest rate and with expensive back end "kickers" thrown in.  If you qualify for an SBA loan it might not be as demanding but it might take a much longer time for you to actually get the money.

I`d like to hear the thoughts of other people on this one.

All the best,

Denise Michaels, Author, "Testosterone-Free Marketing"