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Complete Guide On How to Build a Tech Startup on a Budget of Zero

Jordan Stephanou

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You may have a terrific idea for a tech startup (an app, website etc), but you don’t have funding and you definitely don’t 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.

If it’s an app and you’re 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 – if, and only if, they commit hundreds of hours to turning the idea into reality now, and if the product becomes a resounding success. That’s 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’re good, they probably have 5 phone calls a week from people requesting similar miracles. They’re just not going to be interested.

In my experience, the answer is a simple one:

Get a client.

You may be thinking I’ve lost my head and ask “yes, but, how am I supposed to get a client if I don’t have my product on the market?” I’m glad you asked. I propose the following steps:

Step 1: Ask your Market’s Opinion

In a B2B, this should be at least 10 of your highest value clients. In a B2C, we’re talking hundreds of users. What do they think of the problem? What do they think of the solution you’re 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 being your customer?

Important: Do. Not. Sell.

Explore… Learn… Test your hypothesis… Gather info. This is not the time to acquire your first client. Yet. But it is a critical first step.

Step 2: Develop a Prototype

Yeah that sounds terrifying for someone who’s 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.

It most definitely does not have to be anything resembling the working version, and it definitely 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 “user journey”, 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.

After all, no backend developer could even think of building anything for you if you don’t have a visual representation or process flow of what you want from them. This 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’t be that person. It’s quicker and easier than it sounds, and it’s a fundamental step in the process.

Step 3: Take the Prototype Back to your Market

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’t 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 “ask for funding, you’ll get advice. Ask for advice and you’ll get funding”. Well, I believe the same applies for winning clients. Ask advice to build the ideal product for your market, you’ll eventually capture that market because you’re solving the real problem they have.

I digress.

Now that you’ve taken their feedback, comments, criticism and pleasantries on board since Step 1, and you’ve shown that you’re 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’re 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?

Once again, pursue fatal flaws in your thinking. Pursue cold hard rejection. Pursue them telling you “it’s not going to work because…” . I need to emphasize this point. Some people call it a pre-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’s possible to remove those failure points. If you can, you may just have a massive business in the making. If not, you may have saved yourself years of psychological trauma.

Step 4: Make Adjustments and Do Pre-sales

Now that you’re armed with knowledge from your market based on something more concrete in the form of your first prototype, you’re ready to iterate on your first prototype. Take every comment that you’ve heard on board, along with your own personal convictions, and refine, improve and deal with all the possible failure points they mentioned. If after that you’re still confident this business is solving a real problem and worth pursuing; then proceed.

Now it’s the fun part. Now you’ll have a prototype version 2 (which can still be amateur-ish as long as it communicates your idea effectively) and you’ll be an expert on your problem and solution. Now you organize a third meeting with all those potentially high value clients and your close advisors. You show them that you’ve taken everything on board and you try 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’t be able to pay you anything at the moment because you still don’t have a tangible product, but they will be able to commit in writing. This is the beauty of a pre-sale.

At this moment, you will clearly 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’ll 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 gives you the opportunity 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 “Rolls Royce” version despite the temptation.

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).

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 in order for it to be of value. Don’t 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 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 who are obsessed with your idea and can’t wait for it to be released.

Step 5: Pursue your Technical Co-founder / Development Agency

You’ve 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 definitely 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’ve done your research, you’re absolutely 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 – you’re in a great position. If you have a B2B, you’re in an even better position, because you’ve got the pre-contract, and proof that once the product is built, you have direct cash-flow coming in.

Now it’s 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’t believe like you do, they’re the wrong person. Keep looking.

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.

If you aren’t able to find a co-founder at this point, that’s no problem. 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 – ie. payment on delivery of the MVP, which will then be funded by your first client that signed the pre-contract (you see how that pre-sale becomes a trump card?).

Remember, they’re only building the MVP, so it shouldn’t 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’t have to be rebuilt afterwards. Speak to a few different companies to get the right feel. It’s not worth rushing.

Step 6: Implement at your First Client

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’s exactly what you want.

Usage. Learning. Improving. Re-releasing. The art of a tech startup. Lean methodology.

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.

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 get someone who has 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’t 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.

Step 7: Duplicate

Now it’s the fun part. At this point it’s all about leveraging your previous success to get more success. You’ve 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’re expecting to get your 10th client by the end of year 1, remember that it’s absolutely okay if you don’t. Build strong foundations. Take your time with development. Listen really really well to your users and clients. Don’t build a house on a broken foundation.

Step 8: Further Leverage your Successes

Form partnerships. It’s crazy how even just one client can open up new partnership opportunities. 100 users, 1000 users and you’ll 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’re trying to build, and where the benefit is mutual.

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’s 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 clearly thought through your value proposition and why you’re 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 – therefore the partnership sell from the startup has to be compelling.

Step 9: When to Get Funding

You don’t. Well, that’s not entirely true. If you need funding to get your first client then you’ve got problems. If you need funding to go from one client to two clients, you’ve got problems. Not only is it not ideal from an operational perspective, but investors are just very unlikely to invest if there’s not a compelling proof of concept first.

Pursuing funding at the wrong time can distract you from what is most important – building a better product and serving your clients better. If you’re 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 equals no business.

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’t do within your means, or if there is an incredible opportunity to capture a massive market based on the foundation you’ve built. Funding cannot replace a good foundation.

There you have it. You have a product. You have customers. You have a team. You have the ability to 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?

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Founder of tastePal / Startup Shack / Job Creation Project with African Union & European Union / One Young World

Entrepreneurs

24-Year-Old Hannie Maye Takes Fashion Design by Storm in Somalia

Kimani Patrick

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Born in the United Arab Emirates about 24 years ago, Hannie Maye moved to Kenya at an early age to pursue her studies.

“Fashion Design runs in my blood since young age,” she says. “I had an obsession with fashion, particularly when I saw Tom Ford and Sally Karago on tv I was inspired and I believe they are major part of me becoming fashion and designer during my upbringing before I started this business.”

The global citizen is now the founder, lead designer and namesake of the Somalia-based fashion design company – Hannie Maye (HM).

For Hannie, she never dived right from the beginning. After high school in 2011, she moved to Malaysia to further her studies where she studied Accounting and later flew to Mogadishu, Somalia to start her business in 2015.

Her entrepreneurial journey started out 4 years ago in Mogadishu. It was a bold move, she says, “a very tough time for a Somali youth to even think of designing clothes because of the war.” But this could not deter Hannie from stepping into her passion and turning it into a business, “and right there I made up my mind and decided to move to Somalia and took up on its development, changing the mindset of the youth, changing some young girls lifestyle while educating them the importance of the fashion world.

Becoming the first fashion designer in Somalia wasn’t just a road to success but it was truly tough journey for Hannie. However, she sees it as a dream come true and she is proud to inspire many youths in Somalia who are becoming more involved in fashion industry.

Her company which now dresses top Somali women business and political leaders is poised for the international market. Her vision is to go global and dress men and women from all walks of life. “I just want to reach my dreams and expand my company and my clothing line to compete with international fashion designing companies.” With this, she assures me that it will have to come from her hard word and dedication. “the future more is yet to come,” she expresses her faith.

It has not been a smooth ride though for Hannie, “One of my challenging moments was when I conceptualized the first fashion show in Somalia. I got rejected each time I approached to book a conference hall. Everyone feared extremism because in our community when someone hears the word “fashion show” they think of bikini or women getting naked. But that is not what I was up to, and no one could agree with me.”

To overcome this and many other hurdles, Hannie says loving what she does, holding herself accountable and constantly learning from her mistakes keeps her going.

Her passion is also a great motivation. “I’m on a mission and nothing is going to stop me.”

“Fear is what holds many entrepreneurs back,” she says, “and if you don’t learn to overcome your own fears then nothing will succeed. I don’t let my fears come my way because am promoting my passion  in a developing country where by extremist do not allow women to work let alone dressing stylish, so am taking huge risk for my business and I believe I can overcome all my fears as long as I believe in myself and with God beside me.”

To win the game of business, Hannie advises other entrepreneurs to have a strategic mindset, be creative and engage into constant learning while embracing failure in the process. For her, she engages in meeting new people through networking events, traveling, socializing outside her normal circles, and going online to see what’s new. Having a strong vision to where you want to go and what you want to achieve is something that she also advises as a must have for entrepreneurs.

To get in touch with Hannie Maye kindly send her a whatsApp message or follow her on Facebook.

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From the Village to the World, There’s Not Stopping for Wanjuhi Njoroge

Kimani Patrick

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Being brought up in a small village at the foot of Mount Kenya didn’t prevent the 29 year old Wanjuhi Njoroge from being a successful entrepreneur. Today, Wanjuhi is the CEO of The Web Tekies LTD and RootEd Africa (both which have now been rebranded to Nelig Group).

Her father nurtured her entrepreneurial and leadership skills. She sold eggs and plums mostly after her KCPE. “It was my dad who discovered and nurtured leadership and the entrepreneurial skills in me. I was only 12 and without prior business experience, but my father’s great wisdom guided me through it all.” Says Wanjuhi.

Wanjuhi vividly remembers her first mistake in business while she was still young, “A kilo of sukumawiki (kales) was KES 7 by then, but this woman came and requested that I sell to her a kilo at KES 5 instead. She was poor and said that her children had been sent home for school fees. I knew she had been struggling and so I decided to sell the kales at KES 5. My father wasn’t amused when I narrated the story later that evening but he made me understand why I had to be firm in business.”

Wanjuhi says this early exposure is what motivated her to going into business and her father remains one of her greatest support.

Wanjuhi went into employment at 19 while she was still in college. “I didn’t like it, it was too rigid and constraining. I didn’t have the freedom to spread my wings,” says Wanjuhi.

This dissatisfaction in employment experience saw her go through a series of jobs in different companies. “The longest I stayed in a job was 6 months.” She says.

Her life changed when she went to work in a startup, founded by a young man in his 20’s. “At first I thought his parents were rich. But surprisingly his parents were not rich. This was my very first experience with a young person who was running their own business. I realized that it was very possible for one to quit and run their own business.”

“In 2011 I went to my parents and told them that I was quitting employment to start my own business. My mother didn’t take it lightly. She demanded to see my bank statements. She meant well. I decided to start my business as a side hustle while I worked full-time and took part time classes. My parents   eventually approved of my resignation and my    company opened its doors in January 2013.”

Today, the University of Nairobi graduate who pursued a double major in Sociology and  Communication is a full time entrepreneur. Wanjuhi, together her with her business partner, Eva Njoki, have founded two companies; The Web Tekies Ltd, which is a media conglomerate that assists startups, organizations, individuals as well as groups tell their stories online and offline while RootEd Africa is a social enterprise she founded out of her passion for ICT, mentorship and education.

RootEd Africa seeks to transform lives in rural and remote parts of Africa through ICT and non-curriculum activities such as sports and mentorship. RootEd Africa works with primary schools and the local communities around these schools with an aim of eradicating school dropout cases especially among teenage and adolescent girls who often dropout due to teenage pregnancies and early marriages.

Wanjuhi is also a Vital Voices Fellow 2015, a Global Shaper with the World Economic Forum and the youngest member of the Nyeri County Affirmative Action Social Development Fund (AASDF) Committee. Ann is also a Board Member & School Patron at Kabaru Primary School.

Her advice to young people who want to venture into business is to have a passion, patience and be ready to invest time in learning that thing they want to do. “Start from where you are, from zero and learn your way up.” She advises.

When not courting her clients, Wanjuhi is on the road for adventure, reading a book, watching a documentary or writing on her blog  .

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Article first appeared at Inversk Magazine on June 20 2016

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Go For Gold: Lessons From Chris Kirubi

Inversk Review

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As an entrepreneur, you have to pursue and attempt to achieve the very best possible outcome or reward from the same activity, task or endeavor. Below is advice transcribed from a few of Chris Kirubi’s #AskKirubi show.

Gold is very symbolic to mean the fine things in life. You don’t find gold all around you, but you find at least somewhere close to you. Very scarce indeed. Does that mean it is not meant for everyone? It’s all in your mind. Reach out for the best possible solutions. Reach out for the biggest venture. Reach out for the biggest investment.

Gold is a great reward. Great things don’t come easy. You will struggle to get to it, but the fruits will be there. To be the best, you have to effect change. Don’t be afraid to effect the change. Within our comfort zones, we as entrepreneurs might feel like we have actually achieved it all. When that feeling crosses your mind, that’s when you need to move and effect change. Change is the only constant thing in the world.

Don’t say you can’t move. When you get that mindset, you will be poor. The worst thing you should avoid is being poor in the mind. Do not conform your mind to weak struggles. Conform your mind with strong struggles such that you will put more effort in your deeds. Challenge yourself and out great effort into that. Then expect great rewards.

Arm yourself with knowledge. Knowledge should be your weapon whenever you want to attack and get huge profit margins. Be hungry for knowledge and do not shy away from wanting to know more.

Go for quality. Quality begins with you. Be quality. Don’t be shady. How you look, is how you act. From what and how you dress, to how you carry yourself and interact. Look quality. Talk quality and expect nothing less of quality anywhere you venture into. When you are quality, you will definitely attract quality.

Build your own stature. No matter how difficult it may seem. It will cost you but it will be worth it. Do what you will be proud of. Quality will definitely make you a proud person.

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