Permalink Reply by Hilary Albutt on June 29, 2010 at 0:40
Permalink Reply by Tatenda Muregi on June 30, 2010 at 16:48 Jono,
Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this.
What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.
Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Permalink Reply by Godfrey Parkin on June 30, 2010 at 17:16 Hi Justin
I, like Jono am a student though part-time and distance.
What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.
My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.
And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".
This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.
Justin Stanford said:Jono,
Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this. What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.
Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Permalink Reply by Hilary Albutt on June 30, 2010 at 20:11 Three quick points, Tatenda:
1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)
2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.
3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!
Godfrey Parkin
Permalink Reply by Justin Beswick on June 30, 2010 at 21:27
Permalink Reply by Hilary Albutt on June 30, 2010 at 23:03 Hi Justin
I, like Jono am a student though part-time and distance.
What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.
My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.
And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".
This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.
Justin Stanford said:Jono,
Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this.
What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.
Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Permalink Reply by Godfrey Parkin on July 1, 2010 at 11:02 Godfrey a correction, code like any other writing is covered under automatic copyright, unless there is a specific agreement to the effect that the client gets to keep the code for exclusive use and pays the commensurate rate for that privilege.
The writer always does keep the copyright unless otherwise agreed to in writing.
There is an exception to that however, in that if the programmer works for a company and is not freelance then the code belongs to the company and again the process for the client is to stipulate they want to own the code. As it will multiply the cost as it can limit the programmer from reusing blocks of code in the libraries which are today common practice through the use of API's , script libraries belonging to others in the open source GPL ver 1 - v3, Berkly etc licences and so on.
I agree with your second point though, its better to have 30% of something than 70% of nothing and leading into your third point, this issue depends on the product and so it makes a difference in that way. I have always aimed at the international market where I have a bigger presence than local, to get the local consumers to buy I have had to build a separate web site with information specific to this market. This is fairly common as happens in numerous countries with biig brand name, Google, Bing, MSN,Yahoo etc are but a few examples.
Godfrey Parkin said:Three quick points, Tatenda:
1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)
2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.
3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!
Godfrey Parkin
Permalink Reply by Tatenda Muregi on July 2, 2010 at 1:25 Hilary, you are of course right that code written by an independent (not-employee) programmer belongs to the programmer, unless the up-front agreement is that the code is a work for hire - in which case the agreement is that the programmer will assign ownership to the person who contracted it. My point is that anyone commissioning code should always establish ownership issues up front. At the very least, they should secure perpetual rights to use the code and, ideally, the right to create and use derivatives of it going forward. They should also (depending on the product) secure both exclusivity and reselling rights. Otherwise you can spend a lot of money building code, only to find your developer (or one of their later customers) then starts to compete with you.
If you are looking for VC funding, ownership of your code is a critical part of valuing your business.
Hilary Albutt said:Godfrey a correction, code like any other writing is covered under automatic copyright, unless there is a specific agreement to the effect that the client gets to keep the code for exclusive use and pays the commensurate rate for that privilege.
The writer always does keep the copyright unless otherwise agreed to in writing.
There is an exception to that however, in that if the programmer works for a company and is not freelance then the code belongs to the company and again the process for the client is to stipulate they want to own the code. As it will multiply the cost as it can limit the programmer from reusing blocks of code in the libraries which are today common practice through the use of API's , script libraries belonging to others in the open source GPL ver 1 - v3, Berkly etc licences and so on.
I agree with your second point though, its better to have 30% of something than 70% of nothing and leading into your third point, this issue depends on the product and so it makes a difference in that way. I have always aimed at the international market where I have a bigger presence than local, to get the local consumers to buy I have had to build a separate web site with information specific to this market. This is fairly common as happens in numerous countries with biig brand name, Google, Bing, MSN,Yahoo etc are but a few examples.
Godfrey Parkin said:Three quick points, Tatenda:
1) You DO have intellectual property - the code you have had written for you and the solution concept behind the business (which may be patentable)
2) Make sure you unambiguously own the code. There is still a tendency among programmers in SA to believe that they own code written for their clients, which is fundamentally not the case in law. Don't risk it being held to ransom. It's work for hire, so make sure your agreement states that you own the code and that your developers will hand it over to you.
3) It is a mistake to launch in SA with the hope of launching globally if you succeed here. Launch globally! Your chances of success are much greater if you are exposing your business to 1.8 billion people online around the world instead of exposing it to 5 million people online here. Especially if volume is a significant success factor, go for a volume market at launch. Failing in SA happens often because the local market is not big enough, and is not an indicator of probable failure elsewhere!
Godfrey Parkin
Permalink Reply by Hilary Albutt on July 2, 2010 at 1:34 Thank you Gordon for the pointers! Point 3 opens up my mind to an angle I hadn't looked at things before. Launching in SA to me was looking at "testing" out my concept with "local" users. Your point makes it a fact that with the internet, users are users, why not look at the pool as a whole. The one area of concern to me going local first is that the service in development will rely on the fulfillment services of print vendors (i have just let it out). This means working with a physical product in order to complete the process after the web based user function. Some would say shipping from SA to anywhere in the world for an internet company is not rocket science but I would still like to ask how do I work on that? I could opt to outsource the supply and fulfillment service to overseas based print vendors, but quality control is then out of my hands, or is it?
Tatenda
Permalink Reply by Tatenda Muregi on July 2, 2010 at 1:35 Tatenda, in some cases a trademark provides more protection. You can do a design patent at CIPRO in Pretoria for R60.00. If you need help in writing it please do ask. But the simple rule is do a search first on the patent search databases and then if you cannot find anything similar in any category, start to write a vaguely descriptive piece, do not be too precise as the cyber-squatter-types will rip it off after you publish it on the cipro database. Including images in the trademark bit is essential.
Tatenda Muregi said:Hi Justin
I, like Jono am a student though part-time and distance.
What if my idea has no Intellectual Property but still has potential to be a great online business? As far as I see it, there is also a category of start-ups that are pure web businesses utilizing existing cloud services and web based applications to create services that thrive of fulfilling a need online e.g. product personalization. These types of web businesses in my view offer an appeal (to would be funders) in terms of their scalability, marketing...in other words users.
My project fits into that category but and after realizing last year that it would take more than just my idea to get backing for seed funding, something that is tangible was needed. So i closed all thoughts of funding, extended my timeline and set off boot strapping. Over the past year i have worked with a programmer to develop everything for me (I know no code) on a pay as you go agreement in bits and pieces as well as moving to Cape Town where I feel the environment for tech/web start ups is more conducive. The goal really is to fight to launch my product locally, "test" its viability by accumulating users and then think about taking it global. What I then view as very crucial in that drive to go global is having the funds to market online (SEO and PPC to me is key) and establishing a solid shipping system etc.
And to me, the time taken to go at it this way has enabled me to flesh out my initial idea, throw away my business plan and focus on developing at a low cost and launching as quickly as possible and as soon as the product is usable, then let my users "finish it off".
This may have strayed off topic somewhere but i feel you could throw in some pointers for me in here as well.
Justin Stanford said:Jono,
Nice post! Don't worry, you aren't alone! Loads of great startups were started out of dorm rooms on pennies by students. FireID was run out of a Stellenbosch res room piled to the ceiling with equipment and paper for ages! At 4Di Capital our slogan is "From Garage to Global", and I think garage also implies things like dorm rooms too, so we know this.
What you're looking for is seed money. This is out there, it can be had, especially for promising students. But you need to bear in mind some of the criteria any investor will be looking for, no matter how small the amount, such as: Is there intellectual property being developed here, ideally protectable? If it's an execution play, can the company attain market power or become entrenched? Is this opportunity limited to being local or can it go bigger, even if it's just testing locally? Investing in tech startups is very high risk so investors only look for opportunities that have the potential for equally decent return. Fortunately though the cost to get going online these days is getting lower and lower.
Unfortunately I don't think that business veterans and others are going to reach out to you, as you've asked for, you're going to need to reach out to them. Hopefully Silicon Cape will create a platform for people like you and them to find each other. I think you might be surprised, if your idea is well thought through enough and you can explain it well in a short amount of time, raising the $1500 or more won't be that hard! If you still struggle, maybe your idea needs some refining to make it more investor friendly.
Permalink Reply by William Kleynhans on July 2, 2010 at 10:15
Permalink Reply by Hilary Albutt on July 2, 2010 at 10:32 Vinny Thanks for starting this post, though its seems to have drifted a bit , for me your main question was how to go from local to global, seeing that we are pre -local launch I would say the following:
1. Sort out hosting, its b***** expensive for start ups and most of the time you sit behind in the que to local corporates
2. Sort out tax: Give guys a break on paye/site for only a few years, that money will straight back into the company, that way you can build the support and sales base to be able to service the world 24/7
3. Build relationships for us with Brazil, Argentina, Australia and the like so we can get partners easily , even if its just for language support
4. Lobby the government so that we fix the ridiculous forex setup that means we are locked into a gilded cage.
You know how many politicians I see are part of this site? 1, and she doesnt respond to messages anyway.
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