How do you prove demand at the very earliest stages? What’s the best way to approach and win over investors? How can I get the most from conversations with early users?
These questions and loads more came up today during our first talk as part of our latest Seed Sprint programme with SeedLegals Ireland.
We were joined by Graham Hussey, who prepared our 150+ founders for a week of conversations with users with a talk about his own experiences building Startup Van and Dream Factory, a content creation house.
Graham’s story involves working with hundreds of founders, fundraising, sponsorships, international expansion, and winning over unicorn founders, and from his words of wisdom we have created a list of 10 top tips for demonstrating product-market fit to investors.
Don’t be afraid to ask “would you pay?”(and “how much”) Investors know if you’re building something people will actually pay for. If you’re pre-product, start talking with potential users but be sure to ask straight questions, where you can extract the information you need to make educated product decisions. Don’t be afraid to ask people, a) would you pay and b) how much would you pay. You need to demonstrate product/market fit
Measure everything. There will be lots of people interacting with your product or service in different ways. Especially at the early stages, you should be measuring everything you can to determine product/market fit. Think about people who watch social content, followers, personal network, LinkedIn outreach, intros and feedback, all of these will demonstrate interest in your business. You don’t want to optimise for the wrong thing, but in the early days, paying attention to data ,can highlight user engagement metrics you may have overlooked.
Have a flexible mindset. Your current strategy for finding product market fit may not be gaining traction. That’s normal! Be open to new ideas and feedback, and *listen to your users.* What does your ideal audience respond to most?
Engage investors early. Build trusted relationships with VCs/angels in advance of investment conversations. When Graham did this, investors had already bought into his vision and witnessed him executing on it before fundraising, which made the fundraising process much faster.
Use the network effect. When engaging and building relationships with investors, use connections and networks you already have, and build from there. Graham had a few key investors engaged early, and rather than go out cold for others, he asked those people for intros. The output was not only a wider network of relevant people, but positive feedback coming from the original investors to the new connections, which helped him secure investment.
Have empathy for investors. When asking an investor for ‘a coffee’ or to ‘run through some ideas’, have empathy for their situation / role. If you ask to meet an investor for a coffee to get feedback or advice, you’re essentially valuing an hour of their time at £3.50. Think about whether you can offer something valuable to them in exchange for their advice and you can start to build strong relationships.
An investment of time can be just as powerful as money. Investors are not the only people who have something valuable to offer your startup. At the earliest stages, a potential user giving you 30 mins of time to run through your product / features and provide feedback on prioritisation / pricing can help steer your direction. This feedback, and these types of conversations, are also the exact thing that can demonstrate you can potentially hit product/market fit to investors.
Investors are more than just a cheque. For Graham, his investors act as advisors. He’s surrounded himself with people who enjoy solving the common scaling challenges he faces, and who add new skill sets. Be strategic about who you take money from, and have the relationship working both ways.
Self confidence is important. Be confident in your ability to deliver. Talk about what you’re doing and why you’re the right person/people to do it,
Content is key. As Dream Factory is a content creation house, it goes without saying that our last top tip is that content is king. There’s a lot of noise in the startup ecosystem and a lot of people raising, so you need to stand out. Check out Dream Factory to start creating content that speaks to your brand.
Catch the full talk here (password 8D=D8Yqa).
Seed Sprint is open by registration, not application. Register here.
Get in contact with Graham,