

Ask HN: High tech prototype, 150K spent, 3 people, what would you do? - throwawayhacker

Hello, I am hereby anonymously asking the help of community in steering.<p>Some data:<p>* We have a confusingly high-tech product prototype, similar ones built by teams of champion engineers.<p>* We are 3 people.<p>* Spent total of 150K in 18 months. Raised from Friends &#38; Family.<p>* There is a valid market. There are interested customers in multiple ways. Competitors are huge (and spent many Ms to build theirs) but no market leader.<p>* Prototype crashes occasionally, is not sexy and needs one last coding/debug marathon to a compelling demo to show. I feel it must look polished for a customer to buy.<p>* Time is running out.<p>My current decision:<p>1. Go to silicon valley, stay for several weeks, meet customers/angel investors and as many people as possible. The other two engineers continue fixing issues.<p>2. Give prototype to outside contractors who might help for equity or possibility to join if we get a customer.<p>I feel we have something very valuable, but we are too weak with 3 people to communicate what is at hand.<p>I am in this position first time in my life so don't know what steps would work best. What would you do?<p>Thanks in advance.
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coryl
Take the prototype to as many customers as possible. Gather feedback; see if
interested in alpha program. Close whatever deals possible. Get the
relationship started and have them committed to you.

This probably gives you leverage should you approach investors shortly after.

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teyc
My questions for you:

1\. What do you mean by "confusingly high-tech"? Does the product solve a
problem that is known to the customer? The best product is one that gets out
of the way. This part sounds like the root of your problems.

2\. Does your product actually have that many different uses/market segments?
If you do, I'd recommend you talk to Sean Murphy (I heard him over at TechZing
podcast where he was explaining how to repurpose or repackage and reprice a
product based on different value propositions). He is ex-Cisco manager, and
now advises small high-tech start ups which have a high engineering focus
(i.e. not in the social spaces). You need someone who has some emotional
distance from your product to give you impartial advice.

3\. Is the following a dead certain assumption "I feel it must look polished
for a customer to buy"? For example, if the sponsor/champion think you are on
the right track and closest to what they need for their business, then you
might convince them to be the pioneer/reference customer, where in exchange
for a steep discount and/or deferred payment until all bugs are fixed, they
get to steer the product in the direction their particular industry needs. You
have already said that it has application in several industries, so there is
no way your competitors can focus on them all. Try to find a niche where you
can get buy-in and then focus on it.

    
    
       Remember. At this stage, you are a nobody. No matter
       how polished your product is, there is no track record.
       The person making the call to buy this is risking his
       professional career to support you. He needs to be 
       convinced that you will be there watching his back,
       fixing bugs, and supporting him.
    

4\. What do you mean by "Time is running out"? If you are running out of
money, then make sure the other 2 founders understand the concept of vesting.
This way, if they leave, they'll lose their share in the business. A single
founder can survive off the fumes of an oil rag and push the project along.

~~~
throwawayhacker
1\. As in you cannot easily reproduce, and it is a good, useful technology.

2\. Yes, there are 3-4 different applications. Thanks, I know Sean, he is a
good advisor.

3\. It does need polishing but many seem to advice finding an early adopter
who is open to new technology. I will definitely seek out early adopters.

4\. As in if we had the last leg of product finished, we would be selling
today and already making revenue. Instead I feel we are wasting time.

~~~
teyc
I think I understand #4. What you have is past proof of concept, but not in a
shippable state.

What is the price point we are dealing with?

What kind of sales cycle does your target customer have?

Is this an enterprise sale?

Do you know how many people you need to convince within a target customer
company to get sign off?

~~~
throwawayhacker
It is six figure B2B sales with a long sales cycle. It requires spin selling,
the way it is described in _Major account sales strategy_.

We should meet each customer in their premises, show an attractive demo,
possibly make an early adopter sale.

~~~
teyc
I have heard of sales being done on the back of screenshots on Powerpoint, and
a few front screens spruced up. What is the worst thing that can happen if the
software isn't as polished as you imagined? Do you think they'll invite you
back to show them progress?

The worst (and the best) thing that can happen is that they tell you it is not
what they had in mind. I've got myself out of a lot of strife by showing
photoshop prototypes first. You don't have to lie about it, but explain that
the brains behind the software is done, but the front is being configured for
their industry, and this is an early prototype.

It also gives you an opportunity to find out about their purchasing process,
how the item is going to get budgeted etc.

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jbooth
Whatever you do, don't bring on contractors for the last leg of a complicated
project.

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kovar
Apply to Y Combinator. Apply to Angel List. Apply to 500 Startups.

Look around your local area for incubators.

Depending on what you're doing, Silicon Valley might not be the right place to
go. More appropriate investors and mentors might be located elsewhere.

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bigohms
Take the lead.

A team must be flexible enough to compensate when sh*t hits the fan and a
founder still has priorities to hit the road and continue to build corporate
infrastructure, secure investments and make sales. There is no choice--giving
your "baby" to unknown parties at a critical stage is introducing too much
risk into the equation with no known potential for success.

Before departing, have a strategy session to collaborate and prioritize issues
with the technology. If possible, call in as many favors as possible to bring
spot expert assistance on core issues (i.e. a database guru for multi tenant
join optimization) to give your existing team a boost.

~~~
throwawayhacker
_If possible, call in as many favors as possible to bring spot expert
assistance on core issues_

This is what I thought would be the help of individual expert contractors.
They could put in a trivial period of their time in taking a glance at code
finding issues. I thought each one would risk a small amount of their time
adding up to a few bug fixes on our end. Also we would build relationships and
both sides consider possibility for them to blend in to the company if it
works out well.

~~~
bigohms
The issue is I don't know what the capabilities of your current team are and
what specifically the consultants would be fixing.

I've generally found that outside programmers take a bit of time getting
acclimated with the code and functionality. I was more referring to major
structural changes/issues/optimization recommendations by an outside engineer.
These are generally issues that have long throw implications for the product
that may be worth an cash/equity compensation arrangement.

As long as: 1) the quality of work of the consultant/s is known, 2) you have a
good bug tracking process in place then and 3) they're familiar and okay with
your repo/commit policy then it won't hurt for finding/troubleshooting small
bug related issues--but it is not generally worth it for them nor you as an
equity arrangement. On the upside, having the resources acclimated will also
create a backup on hand for the future and a natural talent pool to recruit
from.

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ig1
How long do you have left?

One option may be to get one of your customers to give you an advance in
exchange for a discount on the final product, or take an equity investment.

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jellicle
Go to potential customer. Tell them you want them to be your primary partner
in developing/finishing this software. Here's the deal: they'll put up
$xxx,xxx - half of it RIGHT NOW - and in return they'll get a free perpetual
license to the software and all updates, and you'll work with them to make the
software absolutely perfect for their needs.

You're selling a future revenue stream at a discount for an upfront payment.
Company benefits, you benefit, you gain one visible user, who hopefully is
happy with the product and is willing to provide quotes for your advertising
materials, and so on.

~~~
throwawayhacker
Thanks, I thought about this when reading Steve Blank's book. The early
adopter is a rare specie. S/he should be aware of the problem, open to new
technology, have the budget, and be ready to spend it:
[http://steveblank.files.wordpress.com/2010/03/earlyvangelist...](http://steveblank.files.wordpress.com/2010/03/earlyvangelists1.jpg)
One other reason I consider the bay area. People are open.

I also saw the possibility that it backfires, e.g., looking like I am
bargaining a price, reducing the product's worth on their eyes. I will
definitely try this though.

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andrewtbham
Try to sell it to a customer and get paid in advance.

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dshankar
Apply to Y Combinator

