Are you running into heartaches and milestones on your entrepreneurial journey? We talked to the CEO of IdeaPros, Fred Cary, about the nuts and bolts of entrepreneurship and the right mindset for success.
“You cannot build a great company without being a great person.” – Fred Cary
With Everything Going on in China and the Ports, When Does it Make Sense to Consider Manufacturing the Product in the US?
The world is on fire; shipping costs are five times higher and take five times longer. There are ships in the port of LA and Long Beach that can’t dock because of worker shortages. Manufacturers in China are buying a hundred thousand square foot facilities to store their excess goods. Prices are going insane, and getting the merchandise in through the port is a whole other issue. So, it’s a good idea to start looking now.
Having something built in the US costs a lot more money, but you avoid the tariffs, the long haul shipping, and freight forwarders you usually have to deal with. Don’t forget to be patient. The global pandemic is affecting the supply chain and your product, just like it is affecting the whole world.
“If you are sitting in a corner and moaning about the crisis, you don’t understand the world. If you don’t understand the world, you are not a good entrepreneur.” – Fred Cary
Look at the situation and find alternatives. Pivot, change, and try a completely new approach. Do whatever it takes to get to the finish line.
What’s The Best Way To Build A List Before Launching Your App?
If you have an unlimited budget, the best way to do it is to spend all your money. Drive all the traffic to your business, but most of us don’t have an unlimited budget. So we have to be smarter and approach things in a guerilla-style way. Harry’s Razors are the best example of a great pre-launch campaign because, for a year, they teased people and were mysterious so they could collect email addresses. By the time they launched their product, they had over a million email contacts.
“The best way to build a list is to put out interesting content.” – Fred Cary
If people share your content, you get new people and the virality everybody is looking for. The process is slow but make sure you fine-tune what you do and get the reactions you want. Get people to reserve for 1$, as they are 20 times more likely to buy when they show an intention to buy. Offer them a discount or priority in getting the product. Motivation is important.
Can You Take Pre-orders Before You Manufacture Your Product?
The best way to get pre-orders is through a crowdfunding campaign, as the delivery rules are different. When you start your business, it is like a new star out in the sky – nobody knows it’s there. You can’t just open the shop, say you are taking pre-orders, and expect it to be a success. You have to spend marketing dollars and work with influencers. People won’t come if you don’t drive them there.
“The only way for people to see your shiny star is if they had a trained telescope. That telescope is your advertisement.” – Fred Cary
Pro Tip: Have in mind different regulations in different states when taking pre-orders.
Can You Crowdfund an App?
Apps are free, so you can’t do regular crowdfunding. However, you can do equity crowdfunding. IdeaPros has a deal with WeFunder, a company with about a 40% market share in equity-based crowdfunding. Equity-based crowdfunding is similar to going public, except you are not public. They can’t trade your shares. You only have to report to your shareholders once a year. They have no exit plan unless you go to another level and become public. The idea is to pitch on the platform and bring in one lead investor who will set the terms for your raise money. Without any accounting paperwork, you can raise to $107,000. If you are a raw startup, you can raise between a hundred thousand and a few million dollars. You have to have a compelling story, a good first backer, and an app that makes a lot of sense.
I am Looking to Share my Business with Family and Friends. How Does it Work?
87% of the money raised by entrepreneurs comes from their friends and family. People who love you and believe in you are interested in helping you when they have a little extra cash. Never raise more than you need and do what you’ve said you would do with the money. Give them a percent of the company or the investment they make. Let’s say you have a brand new company and want to raise $50,000 to help you launch. You should give them a reasonable amount of equity for that money. What is reasonable depends on how bad you need the money and what they are willing to settle for.
When you are a complete startup, your value isn’t higher than half a million dollars. If you want to get $50,000 for a 10% equity, that would be a good deal. Don’t be embarrassed to ask for money if you ask for something you believe in. Treat your friends and family professionally and ethically when you pitch to them. Show them why your product makes a difference and what you need to get to the next step. Be prepared to answer questions concisely and explain what you plan to do with the money.
What is the Next Step After Branding?
Once you’ve protected your branding with a trademark, the next step is to set up some accounts, get your domain name and your social handles reserved. Even when you are in the middle of the branding, make sure the name has a good chance of making it. An attorney can do an initial search and notify you of the situation. If there are more similar trademarks in the same class as you, you should change a name and go down a different road. Once you’ve sure about the name and get all your marks, you file an intent to use it because you are not in the marketplace yet that would be substituted once you are in commerce.
What Do You Look For In A Partner?
IdeaPros looks for entrepreneurial people who want to be their own CEO and take charge. Be ready to roll your sleeves, learn, and surround yourself with smart people. Encourage your team and be above the obstacles together. We can’t make you famous and rich and your product successful. But we can build the best product with the best name, so your chances are higher. Your success depends only on you.
The “Idea Pros” at IdeaPros have the resources, experience, and tools to help you at this step or any step in the entrepreneurial journey. We partner with entrepreneurs at any stage and who are ready to invest their ideas. Apply for an interview and let’s explore partnering together.