About to spend $50k on an app? Read this first
While there’s no doubt that developing an app requires time and money, before you spend a dollar on building an app, I encourage you to take a step back and evaluate the situation first. Atomic Sky’s Fusion Founder Program has been specifically designed to help startup founders address the most important question of all: not whether you can or can’t build an app, but whether or not you should. For nine good ideas out of ten, I think you’d be surprised by the answer.
I’ll borrow Simon Sinek’s ‘Start With Why’ approach to explain a little bit about the point of the Fusion Founder Program. If you’re not familiar with Simon’s thinking, watch his excellent TED talk here.
So, to truly start at the beginning, I’ll start with why we’re running this program.
I get pitched almost every single day, through work or social, and often both in the same day. I hear a lot of ideas. And the brilliant thing about Perth in particular is that a lot of the people with the ideas also have the means to be able to do something with their idea. Consequently, their first instinct is to spend the money and build out the app, or website, or product before exploring whether they should. And a lot of the time, it proves to be an awful waste of money.
There’s far too much of a ‘build it and they will come’ mentality in Perth, where entrepreneurs developing apps see it as an easy way to make a bit of money, usually as a part time thing while they keep their well paid day job.
The reality is that 85% of startups are unsuccessful. There are a lot of ways to measure that statistic, and there are a lot of different percentage points thrown about. I go with 85% because that’s the figure Noam Wasserman (author of The Founder’s Dilemmas) came up with after extensive research of startups all over the world.
If you don’t like 85% then a more realistic figure could even be 90% — as most venture capital funds that invest in tech startups are doing so with an expectation that only one in ten will go on to deliver them a viable return on their investment.
Even experience doesn’t seem to count for very much; the odds of a startup succeeding when driven by VC backed entrepreneur who has previously run a startup that IPO’d… Is only 30%.
So what causes startups to fail? While there are many reasons that startups fail (again, see The Founder’s Dilemmas for more on that), ultimately they all result in the same cause of startup failure. Not having customers. And why don’t these startups have customers? Because they haven’t built something that the target audience wants or needs in the first place.
All of this is really a thorough way of saying that there’s a real need for a program like this in Perth. Atomic Sky are running Fusion Founder’s for multiple reasons: we’re all passionate about tech startups; we’ve all been involved with tech startups before; but mainly to help Perth founders beat those odds.
We have too much talent and far too many good ideas for Perth to fall foul of those statistics. For every startup that’s founded in Perth, nine are founded elsewhere in Australia. Consider the Fusion Founder Program firmly in place to make sure that the 10% of Australian startups that succeed in the next five years are all from Perth!
How we’re going to go about doing that is a much more interesting proposition, and really, there are two different aspects that we have to address. As I have said a couple of times, there’s no shortage of good ideas here in Perth. And that’s really uplifting because it means we have no shortage of entrepreneurs!
Something I fundamentally believe in is that a good idea is only a good idea if 100 people pay you as a direct result of it. That’s the point we’re trying to get people to — a good idea is not the same as having an investable proposition. If you come in to Atomic Sky to pitch your idea then yes, it’s a good idea alright, but in truth, my personal opinion of whether it’s a money-making business is quite irrelevant. However, if you can get 100 people to actually pay you for your idea, then you’ve got empirical evidence that it’s a good idea, which is much closer to having an investable proposition.
What Atomic Sky does, and by extension, what Fusion Founder Program offers, is an opportunity to help entrepreneurs understand that they’re not just building an app, they’re building a company that sells an app to its customers. Therefore in order to build that company, it is necessary to understand what your customers want, what your customers need, and what your customers are willing to pay for. More importantly, you need to understand all of that before you start spending any money, and a long time before you start writing any code.
The other side of the equation is investors. There’s a huge amount of cash tied up in Perth that we need to release, and the ways to do that are A) increase the opportunities for investors, and B) reduce the risk for investors.
It’s often said by startups seeking funding that there’s no investment scene in Perth, which if you dig a little deeper (no pun intended!) isn’t the whole truth. There’s plenty of money here in Perth ready to be invested in things other than mining, specifically tech. What we’re really lacking is the quantity and quality of startup founders who understand that before you build an app, you have to have a customer who needs you to solve a specific problem.
What are we going to do about it? Well we’ve finally arrived at the program itself so I’ll give you the high-level overview. Fusion is a 12-week program designed to do many things:
- Help entrepreneurs and startup founders access their markets (specifically their customers) in much more direct, effective ways (by swapping focus from their idea to their customer).
- Help startups become investable propositions.
- Along the way, help investors get face-to-face with more and better investment opportunities.
At the start of the program we’ll take a snapshot of the business and start to work with them to hit their milestones. At the beginning of the program this involves a lot of face-to-face time spent in workshops and seminars. We’ve got some excellent speakers lined up to deliver relevant content to our founders; from people whose products have launched over the last few weeks, all the way up to people who have recently exited businesses. We’re covering a huge cross-section of startup life.
There’s plenty of information on the structure of the program itself over here, so I’ll wrap up with this. Spending $4,500 on Fusion to find out that you shouldn’t build your app is a far better investment than spending $50,000 to discover that you can’t sell what you’ve built — and it’s by far the best way to take your good idea and turn it into an investable proposition.