Setting up a start-up will always requires a lot confidence to succeed. But at the same time, getting early feedback from potential investors on what is needed to fix any problems is highly beneficial. Its nice to know, in the Philippines, there are incubators like Kickstart to help local start-ups link up with them.
August 02, 2012
Start-ups told to court backers early on
LOCAL START-UPS should ramp up efforts to attract investors early on as feedback will help entrepreneurs improve their products and eventually expand their companies, the maker of a successful smartphone application yesterday said.
Garrett Gee, 25, the founder and chief executive of Scan, Inc., said budding entrepreneurs should not hesitate from reaching out to potential funders, who could open the doors for bigger opportunities.
“They should be as confident as possible. If they (the investors) would say no… they would say the reason why they are not investing [in your company],” Mr. Gee said in a roundtable discussion yesterday in Makati City.
“And that is a good opportunity for us to take that feedback… so that you can improve,” said the maker of the application called The Scan, which lifts Quick Response (QR) codes off surfaces and uses these to lead to a user’s profile to other sites such as Facebook, Twitter and Google+.
The app was launched in late January last year, enjoying 2,000 downloads on the first night of its debut before hitting one million downloads by May.
“[Investors] are a kind of barometer and natural filter to show you why you’re good and why you’re not, especially for newcomers,” Mr. Gee said.
Aside from enhancing the product, tapping funders or crowd sources could also help start-ups to build their networks.
“It is definitely for their experience and networking relationship and connection,” he said. “A lot of situations where we are in everyday, [the investors] have been there themselves. The companies that they funded used to be in that situation.”
Having backers at the get-go also helps in increasing the credibility of the start-up.
“As a young boy, I can’t go to New York and ask for a meeting with big companies, so that is the benefit of working with them” he said.
In a span of a month, his company was able to pool $1.7 million worth of investments from 12 funders last year, including Internet giants Facebook, Google Ventures and pop icon Lady Gaga. The investors control 20% of the company.
While telling IT entrepreneurs to be aggressive in scouting for funders, he also noted that proper timing when launching a project is important.
As of 2011, the company has a valuation of $7 million with 10 million downloads in 77 countries, and at one point surpassed game application Angry Birds in the Apple iTunes App Store rankings as the fastest downloaded free app.
Scan generates revenues through advertisements. The company plans to engage in e-commerce. – Cliff Harvey C. Venzon