Please check Part 1 of the article before reading this one!
Business model for the startup idea
Well, something about money. We should define who is our client. Probably, this would be investors. We will attract startups with a possibility to be listed and become visible for potential investors free of charge. On the other side, we can charge investors, providing them with useful, insightful, analytical information about startups. The value of this information is that it is prepared by soulless, impartial software, and after reviewing the data provided, an investor is ready to make a decision to invest or not to. Assumably, investors will be ready to pay for this info.
Let’s imagine how our paid packages could look like:
MVP development for the startup idea
Developing such an ambitious startup idea, there is a separate challenge to define the frameworks of an MVP. The basic idea, its core startup analytics algorithm seems to be a large and integral thing, and there is no way to eliminate some functionality to define an MVP – looks like it should be developed at once and in full for the release version. Anyway, it is a great risk. So, we need an MVP.
According to the Customer Development approach, for MVP needs we can find a customer and try to deliver a product/service for the customer manually, without any developed software. Let’s imagine we carry out some analysis of a couple of startups by ourselves then, to propose this info to investors. This is a bad idea because, acting this way we will face competition with consulting agencies, in other words, it is their business. What’s more, we declare automated, digital startup analysis instead of a manual one.
Thus, we can’t do without some software development. Let’s get back to the list of aspects that our software should analyze about startups and select just any one to focus on. Following the product management principles, we should select either the most risky aspect or the one that is fastest to do and test. For instance, let’s try the first aspect: Data provided by a startup. Here we will have such information as title and description, parties to the process, industry, pain addressed, solution, target audience etc. So, let’s develop some software algorithm that will analyze this data with the aim to provide a startup with some insights on how a startup’s self-presentation can be improved. Probably, this is a good way to start, with a readiness to develop the software in the future, covering more and more aspects of a startup’s deep analysis.
One more aspect we would like to mention about the MVP development is the necessity to narrow our target market geographically. That is, to launch the MVP in some place with an integral, developed startup ecosystem, for example, in London. Developing this product we should focus on local startup communities to start gaining the reputation and let our software algorithm to learn. We shouldn’t focus on worldwide release and promotion, it is better to focus on a selected local community of founders and investors, so that the majority of them use our website actively. After achieving this, we can “open” other regions. This is, by the way, Facebook’s launch strategy that ensured its success. Even though our startup idea is not fully a social network, we should also apply this “divide and rule” approach.
Big conclusion and some more insights
A centric point of this article is assumptions that currently there is a need in fundamental comprehensive analytics about startups and their market environment. Investors are constantly looking for budding startups and are interested in getting fundamental information about them, which they are unable to get performing analogue desk research. So, does it mean that there is a market demand in a high-quality startup analytics? – Probably yes. Even though there are a lot of consulting companies that audit startups, we can try to offer even better analytics. Providing that we are able to create a software solution that will generate better analytics on startups than consulting companies.
Software capabilities for deep analysis
Actually, no doubts that software can analyze startups better than people. A recent example is IBM Project debater, which is capable of analyzing millions of pieces of information available on the internet in the given area of knowledge. Its main goal is to perform comprehensive debate experience based on data processed and imagine its capabilities will be focused on startups’ investment potential analysis? – It will, for sure, generate very interesting outputs about startups. Both for startups and investors. So, if we decide to go on with the described startup idea, we should keep in mind potential competition with such companies as IBM, Google, Microsoft, because even right now they are very close to the development of such a solution, having necessary development resources. By the way, this startup idea is exactly about further incorporation in one of mentioned companies, providing that you have achieved a significant result in in-depth startup analysis and some company buys you.
Some interesting outcomes of the startup idea
With the developed startup idea of a software for in-depth startups’ analysis, we will probably see some interesting things. For example, there will be a startup that nobody believes in, startup community vote is negative. But the system considers it as promising with, let’s say, 83% success chance. Some investors decide to invest, even the risk is high, and the startup really becomes successful. For sure, such cases should be recorded for further reevaluation. In addition, the system probably could make a wrong assessment, which should also be recorded.
Anyway, we are of the opinion that at a certain stage of such software development, it will stop making mistakes.
At a later stage, when the startup idea turns into a product with a good reputation and a community of users and when it stops making mistakes, we can offer super analytics about startups’ industries and global investments for marketing agencies, association of investors, startup accelerators, startups itselves etc.
Thank you for your time reading this article. Kindly please let us know if you decide to bring digital culture to startups-investors relations and to develop this startup idea. We will share the news in our social networks. )
More startup ideas’ analysis
Please have a look at more articles where we analyze startup ideas: