{"id":4682,"date":"2019-05-28T06:36:48","date_gmt":"2019-05-28T03:36:48","guid":{"rendered":"http:\/\/www.inversk.co.ke\/?p=4682"},"modified":"2020-03-29T21:21:39","modified_gmt":"2020-03-29T18:21:39","slug":"complete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget","status":"publish","type":"post","link":"https:\/\/www.kenyanenterprise.com\/sites\/jordan\/article\/complete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget\/","title":{"rendered":"Complete Guide On How to Build a Tech Startup on a Zero Budget"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-large\" style=\"float:left\"><div class=\"counts mashsbcount\">506<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-large mash-center mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.kenyanenterprise.com%2Fsites%2Fjordan%2Farticle%2Fcomplete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Share<\/span><\/a><a class=\"mashicon-twitter mash-large mash-center mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.kenyanenterprise.com\/sites\/jordan\/article\/complete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget\/&amp;via=enterprise_ke\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Tweet<\/span><\/a><a class=\"mashicon-subscribe mash-large mash-center mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-large mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><div class=\"mashsb-toggle-container\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>You may have a terrific idea for a tech startup (an app, website, etc), but you don\u2019t have funding and you don\u2019t have hundreds of thousands of spare cash lying around to invest in a project that may or may not bear fruit down the line. What do you do? Most people will let the dream die there and then.<\/p>\n<p>If it\u2019s an app and you\u2019re not technical, many would seek out a technical co-founder that they barely know, pitch this flaky idea with the promise of equity down the line \u2013 if, and only if, they commit hundreds of hours to turn the idea into reality now, and if the product becomes a resounding success. That\u2019s not the most appealing pitch for the software engineer, right? I mean, this person could be spending those hours building any product for themselves, or earning good money at a corporate. Also, if they\u2019re good, they probably have 5 phone calls a week from people requesting similar miracles. They\u2019re just not going to be interested.<\/p>\n<p>In my experience, the answer is a simple one:<\/p>\n<p><em>Get a client.<\/em><\/p>\n<p>You may be thinking I\u2019ve lost my head and ask \u201cyes, but, how am I supposed to get a client if I don\u2019t have my product on the market?\u201d I\u2019m glad you asked. I propose the following steps:<\/p>\n<p><strong>Step 1: Ask your Market\u2019s Opinion<\/strong><\/p>\n<p>In a B2B, this should be at least 10 of your highest value clients. In a B2C, we\u2019re talking hundreds of users. What do they think of the problem? What do they think of the solution you\u2019re proposing? What holes do they see in it? What would they do differently if they were you? What fatal flaws do they see that will prevent your idea from succeeding? What would your product have to be for them to guarantee to be your customer?<\/p>\n<p>Important: Do. Not. Sell.<\/p>\n<p>Explore\u2026 Learn\u2026 Test your hypothesis\u2026 Gather info. This is not the time to acquire your first client. Yet. But it is a critical first step.<\/p>\n<p><strong>Step 2: Develop a Prototype<\/strong><\/p>\n<p>Yeah, that sounds terrifying for someone who\u2019s not technical. How am I supposed to do that without any programming knowledge, you might ask? Fear not, the 21st century has gifted us with an amplitude of free online drag-and-drop tools that even your grandmother could use to build your prototype (see Just in Mind and Proto.io as two examples). Still, terrified? Have you ever used Paint? What about Microsoft Word? What about a notebook? Your prototype, in its simplest form, is supposed to show off your idea in a way that people can visually understand.<\/p>\n<p>It most definitely does not have to be anything resembling the working version, and it does not have to show off all the features you want in your dream product. This prototype (or wireframes, in its simplest form), is a series of screens that can help get further buy-in and feedback on your idea. They should show a \u201cuser journey\u201d, or what would happen if a user clicks this, or what new screen would open if a user clicks that. This is essential for talking to potential clients, and for talking to potential software engineers.<\/p>\n<p>After all, no backend developer could even think of building anything for you if you don\u2019t have a visual representation or process flow of what you want from them.\u00a0This is the point where most non-technical founders give up. Because the idea of developing a process flow, user journey and wireframe (screens) and prototype for their idea sounds daunting, the dream reaches its premature death. Don\u2019t be that person. It\u2019s quicker and easier than it sounds, and it\u2019s a fundamental step in the process.<\/p>\n<p><strong>Step 3: Take the Prototype Back to your Market<\/strong><\/p>\n<p>Remember those people you spoke to in step 1? They respect you. They love someone coming to them with innovative ideas asking for their advice for their egos. Because you weren\u2019t looking to sell to them, you made them feel like a thought leader in the space, that you were relying on their wisdom, and they will be happy to be on this journey with you. They say \u201cask for funding, you\u2019ll get advice. Ask for advice and you\u2019ll get funding\u201d. Well, I believe the same applies to win clients. Ask advice to build the ideal product for your market, you\u2019ll eventually capture that market because you\u2019re solving the real problem they have.<\/p>\n<p>I digress.<\/p>\n<p>Now that you\u2019ve taken their feedback, comments, criticism, and pleasantries on board since Step 1, and you\u2019ve shown that you\u2019re serious about this idea by designing a prototype (no matter how amateur it looks), they respect you infinitely more than any of the hundreds of other people trying to sell them useless things. By taking it beyond an idea to prototype, you are already in the top 1%. Now with this prototype, you repeat Step 1. Once again, no selling. Based on what you\u2019re showing them, have you truly understood their problem? Are they confused by your prototype? Do they understand that they are your target market? Do they understand the user journey? Do they agree?<\/p>\n<p>Once again, pursue fatal flaws in your thinking. Pursue cold hard rejection. Pursue them telling you \u201cit\u2019s not going to work because\u2026\u201d. I need to emphasize this point. Some people call it a post-mortem. Ie. Before you even have a business, you want to note down all the reasons why your business will fail. This so important, because if you can make it your mission to understand why it will fail, then you can make it your mission to see if it\u2019s possible to remove those failure points. If you can, you may just have massive business in the making. If not, you may have saved yourself years of psychological trauma.<\/p>\n<p><strong>Step 4: Make Adjustments and Do Pre-sales<\/strong><\/p>\n<p>Now that you\u2019re armed with knowledge from your market based on something more concrete in the form of your prototype, you\u2019re ready to iterate on your prototype. Take every comment that you\u2019ve heard on board, along with your convictions, and refine, improve and deal with all the possible failure points they mentioned. If after that you\u2019re still confident this business is solving a real problem and worth pursuing; then proceed.<\/p>\n<p>Now it\u2019s the fun part. Now you\u2019ll have a prototype version 2 (which can still be amateur-ish as long as it communicates your idea effectively) and you\u2019ll be an expert on your problem and solution. Now you organize the third meeting with all those potentially high-value clients and your close advisors. You show them that you\u2019ve taken everything on board and you try to get a commitment out of them. Hear me out, if you have truly listened to the needs of your ideal client, and your solution is genuinely going to solve the problem that they have, they will be ready to commit. They won\u2019t be able to pay you anything at the moment because you still don\u2019t have a tangible product, but they will be able to commit to writing. This is the beauty of a pre-sale.<\/p>\n<p>At this moment, you will communicate with them what your Minimum Viable Product will include (version 1), and what could come in iterations thereafter. Make sure that the MVP is the leanest, quickest, simplest, least features version solving only 1 problem that you can think of. This is important in the following 400 ways (well, I\u2019ll only list a few here but you get the point): an MVP is easier to explain what your solution is to your client. An MVP is easier to explain to a software engineer. An MVP is cheaper to build. An MVP is quicker to build. An MVP gives you the opportunity of getting lessons from your market in real-time. An MVP allows you to excite your clients with a list of other features that will come at a later stage. I could go on and on. The point: Start with an MVP, and not the \u201cRolls Royce\u201d version despite the temptation.<\/p>\n<p>So now your potential client loves the idea of your MVP. They sign your pre-contract stating the following: If X (insert business\/product name here) is built according to the following requirements (all of the requirements of your MVP, along with any service-related elements you may include), then the purchase will be completed at a discounted pre-sale price of Y (insert pricing model here).<\/p>\n<p>Of course, there should be an incentive for your client to want to commit to the possibility of the product now, and an attractive pre-sale discount is usually the best way to go. Bear in mind, this is under the assumption that this is a B2B tech startup. In the case of B2C where there is no sign-up cost, I recommend getting proof of interest from as many users as possible. Something like a Google Form could work for this, but in a B2C market, you might need thousands of people to complete the form saying that they would use your app for it to be of value. Don\u2019t let that put you off, using social media, and getting the right shares from people in your network who believe in your idea can easily lead to getting the volume of completed forms you need. The point of this is to get some of the proof of pre-commitment and proof of more than a just mildly interested market. You need to have a compelling case that you have a captive market that is obsessed with your idea and can\u2019t wait for it to be released.<\/p>\n<p><strong>Step 5: Pursue your Technical Co-founder \/ Development Agency<\/strong><\/p>\n<p>You\u2019ve made it this far, and now this is the final and one of the most important parts of the jigsaw to take the product to market. If you approached someone to build the app\/website when you just had an idea, you would have no leverage and no reason to get anyone excited. However, now, you have options. To have options is to have power. You would much rather any negotiation with power rather than no power, right? Now that you\u2019ve done your research, you\u2019re confident in the vision of your business, and you have tangible proof from your market that when the product is ready, you will capture that market &#8211; you\u2019re in a great position. If you have a B2B, you\u2019re in an even better position, because you\u2019ve got the pre-contract, and proof that once the product is built, you have direct cash-flow coming in.<\/p>\n<p>Now it\u2019s time for you to choose your development option based on your network and preferences. If you know someone who is the right fit, with incredible technical skills (ideally well versed in the full tech stack, a self-teacher, and up to date with the latest technologies) and infallible integrity, pursue that person as a co-founder and use your newly powerful sales pitch and proof to win them over. Offer them equity of a business that you already have some level of proof will get off the ground. Sell them on your vision; sell them on the possibility of being part of something great. If they don\u2019t believe as you do, they\u2019re the wrong person. Keep looking.<\/p>\n<p>In an ideal world, you would find the right person as your technical co-founder and you are in it together through it all. This is undeniably your first choice.<\/p>\n<p>If you aren\u2019t able to find a co-founder at this point, that\u2019s no problem. The next best thing is to use an external contractor to do the development work of your MVP. That would probably be a software development company; the top ones in your area can be found through a quick Google search, and by browsing their websites to assess credibility. Find a contractor that is reasonably priced and who agrees with your payment terms \u2013 ie. payment on delivery of the MVP, which will then be funded by the first client that signed the pre-contract (you see how that pre-sale becomes a trump card?).<\/p>\n<p>Remember, they\u2019re only building the MVP, so it shouldn\u2019t take more than 3 months. Be sure to find a team that is competent and has a body of work that you can trust, so that the MVP doesn\u2019t have to be rebuilt afterward. Speak to a few different companies to get the right feel. It\u2019s not worth rushing.<\/p>\n<p><strong>Step 6: Implement at your First Client<\/strong><\/p>\n<p>This will take on the form of a pilot and proof of concept. Things will go wrong. There will be lessons. Parts of the app will need to be updated and improved based on user feedback. Great, that\u2019s exactly what you want.<\/p>\n<p><em>Usage. Learning. Improving. Re-releasing. The art of a tech startup. Lean methodology.<\/em><\/p>\n<p>At this point when you have one real client with real users, you have a real business. Now you can build a team much easier than with an idea. At this point, if you want to hire an in-house developer (to replace an external software development team), or if you want to take some work of the hands of your technical co-founder, I have a suggestion. I introduce to you, Linkedin.<\/p>\n<p>Search for Computer Sciences students at nearby universities. Scour pages and pages and reach out to people who may appreciate being part of something to supplement their university lessons in the real world. Your goal here is to then meet with as many of them as possible. Try to get someone who has the technical knowledge to join you for the interviews, so that they can assess the technical side while you assess the human side. Find the right person and sell them on the opportunity to build something that real clients will use. Appeal to the intrinsic motivation of lessons rather than the financial side. What student passionate about tech wouldn\u2019t want to work for an exciting tech startup that has users and a bold vision? At this point, you can probably pay them within your means too, based on the revenue from your first client.<\/p>\n<p><strong>Step 7: Duplicate<\/strong><\/p>\n<p>Now it\u2019s the fun part. At this point, it\u2019s all about leveraging your previous success to get more success. You\u2019ve got 1 client? Phenomenal. Do you know how much easier it is to go from 1 to 2 than it was from 0 to 1? Much easier. Then going from 2 to 10. Even easier. Once again, this all relies heavily on how well you implemented Step 1 and Step 3 (the feedback stages) to ensure that your business is solving a real problem. If it is, the sales process will be relatively smooth and painless. Disclaimer: It will always take much longer than expected, so if you\u2019re expecting to get your 10th client by the end of year 1, remember that it\u2019s okay if you don\u2019t. Build strong foundations. Take your time with development. Listen well to your users and clients. Don\u2019t build a house on a broken foundation.<\/p>\n<p><strong>Step 8: Further Leverage your Successes<\/strong><\/p>\n<p>Form partnerships. It\u2019s crazy how even just one client can open up new partnership opportunities. 100 users, 1000 users and you\u2019ll have many options that could increase your credibility, and give you excellent PR exposure and help you scale faster. Choose your partnerships wisely in correspondence with the brand you\u2019re trying to build, and where the benefit is mutual.<\/p>\n<p>The right partnerships at the right time can be the key to success. Similar to what you did with clients in Step 1 and Step 3, there\u2019s nothing wrong with building relationships with potential partners first to find out what sort of business they would partner with, and if they would see value in partnering with you. But first, make sure you have thought through your value proposition and why you\u2019re even talking to them in the first place. Do they need you? Would partnering with your business help them in a significant and obvious way? Remember that partnerships generally lead to brands being interlinked, so a major company has a lot more to lose in this sense than a startup \u2013 therefore the partnership sells from the startup has to be compelling.<\/p>\n<p><strong>Step 9: When to Get Funding<\/strong><\/p>\n<p>You don\u2019t. Well, that\u2019s not entirely true. If you need funding to get your first client then you\u2019ve got problems. If you need funding to go from one client to two clients, you\u2019ve got problems. Not only is it not ideal from an operational perspective, but investors are just very unlikely to invest if there\u2019s not a compelling proof of concept first.<\/p>\n<p>Pursuing funding at the wrong time can distract you from what is most important \u2013 building a better product and serving your clients better. If you\u2019re consumed by the idea of receiving investment, take a deep breath, and remember: A good business is run off paying clients that create a sustainable revenue stream, not through external investments that paper over the cracks. No clients equal no business.<\/p>\n<p>However (and this is very important), if you need funding to go from 10 clients to 1000 clients, then get funding. Pursuing investment makes sense when scaling at a rate that you can\u2019t do within your means, or if there is an incredible opportunity to capture a massive market based on the foundation you\u2019ve built. Funding cannot replace a good foundation.<\/p>\n<p>There you have it. You have a product. You have customers. You have a team. You can build and scale. You had zero budget but through the right steps, you can build lean and grow a successful business. Entrepreneurship is fun, right?<\/p>\n<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-large\" style=\"float:left\"><div class=\"counts mashsbcount\">506<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-large mash-center mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.kenyanenterprise.com%2Fsites%2Fjordan%2Farticle%2Fcomplete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Share<\/span><\/a><a class=\"mashicon-twitter mash-large mash-center mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.kenyanenterprise.com\/sites\/jordan\/article\/complete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget\/&amp;via=enterprise_ke\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Tweet<\/span><\/a><a class=\"mashicon-subscribe mash-large mash-center mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-large mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><div class=\"mashsb-toggle-container\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47-->","protected":false},"excerpt":{"rendered":"<p>You may have a terrific idea for a tech startup (an app, website, etc), but you don\u2019t have funding and you don\u2019t have hundreds of thousands of spare cash lying around to invest in a project that may or may not bear fruit down the line. What do you do? Most people will let the [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":4680,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","sync_status":"","episode_type":"","audio_file":"","castos_file_data":"","podmotor_file_id":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","footnotes":""},"categories":[172,3,7],"tags":[59,173],"series":[],"episode_featured_image":"https:\/\/www.kenyanenterprise.com\/wp-content\/uploads\/2019\/05\/using-mobile-smart-phone.jpg","episode_player_image":"https:\/\/www.kenyanenterprise.com\/wp-content\/plugins\/seriously-simple-podcasting\/assets\/images\/no-album-art.png","download_link":"","player_link":"","audio_player":false,"episode_data":{"playerMode":"dark","subscribeUrls":{"apple_podcasts":{"key":"apple_podcasts","url":"","label":"Apple Podcasts","class":"apple_podcasts","icon":"apple-podcasts.png"},"stitcher":{"key":"stitcher","url":"","label":"Stitcher","class":"stitcher","icon":"stitcher.png"},"google_podcasts":{"key":"google_podcasts","url":"","label":"Google Podcasts","class":"google_podcasts","icon":"google-podcasts.png"},"spotify":{"key":"spotify","url":"","label":"Spotify","class":"spotify","icon":"spotify.png"}},"rssFeedUrl":"https:\/\/www.kenyanenterprise.com\/feed\/podcast\/default-podcast","embedCode":"<blockquote class=\"wp-embedded-content\" data-secret=\"JnSfl1zrqW\"><a href=\"https:\/\/www.kenyanenterprise.com\/sites\/jordan\/article\/complete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget\/\">Complete Guide On How to Build a Tech Startup on a Zero Budget<\/a><\/blockquote><iframe sandbox=\"allow-scripts\" security=\"restricted\" src=\"https:\/\/www.kenyanenterprise.com\/sites\/jordan\/article\/complete-guide-on-how-to-build-a-tech-startup-on-a-zero-budget\/embed\/#?secret=JnSfl1zrqW\" width=\"500\" height=\"350\" title=\"&#8220;Complete Guide On How to Build a Tech Startup on a Zero Budget&#8221; &#8212; Kenyan Enterprise\" data-secret=\"JnSfl1zrqW\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\" class=\"wp-embedded-content\"><\/iframe><script type=\"text\/javascript\">\n\/* <![CDATA[ *\/\n\/*! 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