When do You Need Funding?

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

972816_tape_measureI 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.

Growing

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.

A cracked head and social media



Tony Ndungu at SM4SC – day 1, originally uploaded by whiteafrican.

This is Tony Ndungu, my new best friend. He’s the guy who quickly patched up the 2.5 inch gash in my skull the other day as I almost knocked myself out on a lower-than-average restroom door frame (building regulations aren’t followed that closely in Kenya).

Tony and I were on our way out of Nairobi for a meeting by Plan International on how social media can be used for social change (SM4SC). They do a lot of work with youth all over Africa, so it makes sense that they’re trying to get a handle on how they can use the mobile phone and the web to connect better and have a greater impact with that demographic.

The best part of this is that the medical bill came out to 1300/= shillings (about $16.25) for a doctor and nurse to clean it, bandage me up, give a tetanus shot, and some painkillers. Imagine that!

Maybe all those years of strengthening my skull bones playing rugby paid off… :)