BY ARJITA SETHI
So you have an idea? Or an early stage Startup? You go ahead and make a plan of how you would reach your milestone. You list out everything, the team, the logistics, the product cost, and the customers.
What do you need next? A little validation around does your idea really stand a chance! And so you go ahead talk to a few people who look like your potential co-founders, customers and see what they say.
They really get excited! GREAT! Now, what do you need to get this exciting new thing that solves a big problem for people to the people?
Now here is a catch.
You are an early stage startup, too young to seek venture funding but without funding, there is no likelihood of making any progress. I completely understand as I have been in this chicken and egg situation in my early days too. So here are the alternatives that worked for me. Mind you, I used ALL of them seriously 😀
Chances are that this may not be something you are doing right out of college and have worked before which gives you the luxury of having a decent amount of savings. Try to do your first lean experiments with this.
Word of CAUTION: Don’t get carried away spending everything you have. This is your hard earned money and so the point of starting from here is to make sure that you do some very basic and super lean experiments.
How I did it: My cofounder and I made a budget and told ourselves what this money was going towards. We found a remote team to help us and were very strict on what milestone we needed to achieve. What I learnt though was that startups and getting results from an experiments takes longer than you usually think.
“If you think you need 3-month runway, think again, try planning a 6-month runway, just in case.”
If you are solving a problem that you think has a cool quotient or a social impact, I recommend relying on the power of people. We created a small MVP with our saving and then wanted to do pilots and get some early adopters on our product. We used the Indiegogo platform and raised close to $21K. I know this is not a big million dollar check but it sure brought us not just capital but validation, customers (we reached 12,000 kids in 5 countries), and some brand champions who talked about us!
Word of Caution: Everyone who does a crowdfunding campaign doesn’t end up raising. It takes a lot of hustle, marketing, and outreach to create content and reach your audience.
How I did it: we kept a small target of $15K so that it remains an achievable goal. We got tons of help from our friends in spreading the word, donating to our campaign and helping us make the product video.
Chances are you have a skill! Right? Use it! For the longest time, my co-founder and I had our side hustles that more than just capital gave us the freedom to work on our startup. Yes you need focus to work on your company but I say that being able to just run your startup is a luxury in itself and till you can’t afford it, go the side-hustle way and thank me later 🙂
Word of Caution: Don’t take up anything just because it pays. Everything you do leaves a mark on the internet so be careful about the kind of work you are doing. Ask yourself, if it resonates with your mission or at least makes you happy. I learned so much from my side hustles about my own business on how to build culture, how to best use talent, and how best to make a productive and motivated team.
How I did it: I am passionate about social impact, inclusion and education and those were my side hustles. I worked for non-profits, startups creating equality and taught Social Entrepreneurship at SFSU. Since all the places I worked at had limited budgets, they were ok for me to work part-time.
Family and Friends
Never discount the people who love you and have faith in you. These are the people who work have seen you closely for most of your life and understand the real hustle you are doing to create a change and solve a problem. Even though I am an international founder which means that I didn’t have any rich family in the US still we talked to our closest friends and they became our supporters and early investors. Our family helped us too and looking back it wasn’t a huge amount that we raised, still, it gave us the runway for 6 months which helped us launch our beta.
Word of Caution: I am not a legal expert and to get any investment in your company you NEED A LAWYER!
How I did it: It’s a complex process that our legal advisors managed but it was well worth the effort.
Accelerators and Competitions
The only thing that comes close to a VC funding in a very early stage of startup is an accelerator. There are tons around the world. Some of the best being Y Combinator and techstars though equally difficult to get into. In our case we went into an edtech accelerator due to the focus of our company. And ofcourse competitions are such a great way not just to get some equity free capital but also to get credible marketing. We became one of the 11 semi finalists for the global literacy XPrize that was sponsored by Elon Musk and that gave us tons of facetime with some of the world’s biggest changemakers.
Word of Caution: Ask questions from the accelerator that you want to become part and if there are any red flags or grey areas, don’t join them. Try to talk to other founders who have gone through the process already and see what they say.
I honestly believe that we need smart people to be solving the biggest problems of the world and entrepreneurship is the way to do it. But realistically it is hard and there is no tried or tested method. So make a tribe of founders around you and support each other. That will give you hope and a channel to share your struggles/wins.
Also, feel free to connect with me if you think I can help!
Arjita Sethi is a serial entrepreneur and currently the co-founder of Equally that is making Augmented Reality experiences for kids to make them move and explore the real world with their friends. The product is called Da Vinci Club AR. She currently serves on the Center’s Advisory Board.