I’ve spent the last couple days in scenic Salzburg, Austria with 20 other people from both traditional journalism and new media backgrounds. Our goal: discuss strategies for more effective engagement and investment in “tomorrow’s media“. There are a mixture of organizations in the room, some established and others start-ups, like myself representing Ushahidi.
One of the questions posed, and which I’ve been ruminating on, is “when do you need funding?” (At this particular meeting, we’re talking grants primarily, but this applies to traditional seed and VC funding as well.)
Invest in Doers not Talkers
I don’t think it’s as early as most people think. There are a lot of people out there who claim they need funds in order to build a product. I disagree. Your first job is to build it. It might be in your nights and weekends, but that’s to be expected.
Yes, at a certain level you need funding that allows you to live, feed yourself and grow a business, but that’s not until you actually have something to show. Why would you expect someone to pay you money for a good idea? There are good ideas everywhere, but few examples of great execution upon these ideas.
A great presentation, Powerpoint or speech will get you a long way, and the ability to communicate is essential in both getting funding and getting user adoption or partners to work with you. However, nothing sells a good idea like a working product.
Whether it’s building a prototype, like we did with Ushahidi in Kenya, or a couple guys in a garage creating a new search algorithm and having to shop the product of that research around before they find investors, it’s too be expected that the work comes first, the funds second.
When is funding needed then? It’s needed when you have a product and it shows potential for success. Where you can talk to smaller investors who can support your work a little longer so that it can be refined and grow into something that has a real chance to make a difference, make money or both.
The second level of funding is about scale. It’s when you have a proven product that already has some success and needs more than it’s current cash-flow, or personnel, to take it to make a broader impact.