Joel Burgess is the founder of Nutrifix, an exciting start-up that has recently successfully raised £150k through Crowdcuve the world’s leading crowdfunding website.
With so many apps on the market, it’s become more difficult than ever to differentiate your product and secure the necessary funding. We met with Joel to understand how he had successfully raised capital through crowdfunding, and the lessons he has learnt along the way.
1. Hedge your bets
It’s important to diversify and not rely on one investor. Angel investors are inundated with opportunities and can change their minds in a second. The more people you can get in front of the better your odds of securing the funding. It also puts you in a far stronger negotiating position as they each know there are other investors interested and it generates a clear sense of momentum.
2. Nail your elevator pitch
No matter how well prepared you are with spreadsheets and business plans, nobody will invest if they don’t understand the problem you’re trying to solve. It needs to be clearly and concisely articulated.
3. Research investors with an interest in the sector
Further to the above, it’s important for people to understand the market and problem you’re trying to solve. Interest in the health sector is booming so I was able to get in front of lots of people who had a keen interest in the market, which meant they instantly ‘got’ the vision.
4. Focus on a problem that you have experienced
Nutrifix was born out of a problem I experienced and came about organically.
I found it all too easy to fall of the ‘health band wagon’ when living a busy hectic life. I simply did not have the time to prep my meals and was constantly eating on the go. To make sure I was eating the food that met my needs I would try to have the same lunch every day – salmon sashimi. Needless to say this soon became incredibly boring. I created a spreadsheet of meals that met my nutritional needs. It worked on a simple calculation of calories and macronutrients along with details of locations I could buy that food.
I was doing a bit of personal training on the side of my day job at the time and I ended up selling this simple tool along with tailored meal plans for £75,. Whilst it solved the problem for a period, it was still too much effort and didn’t fully solve the problem. Only at this point did I think about creating an app. The entire thing was an accident.
5. Solve this one problem well
As soon as we started developing Nutrifix I found myself becoming distracted and trying to solve more problems. I soon realised, however, that I was only complicating the proposition and watering down its real value. Instead I had to be completely focused on solving one problem well – how could busy people find places near them that sell a meal that perfectly meets their nutritional needs? Until we nailed that everything else was a distraction.
6. Concentrate on your early adopters
It’s tempting to try and appeal to everyone but I believe its more important to be indispensable to a core user group in the early stages. In our case that’s gym bunnies. They immediately ‘got it’ and used the app every day, regardless of its early imperfections. These early adopters got me through the initial stages and allowed us to demonstrate to investors the initial traction and momentum that they value so highly.
7. Prove that you’re able to control costs
Investors want to know that you’re resourceful and will stretch the funds they invest.
Anyone can attract users if they throw money at advertising. I believe what our investors liked about Nutrifix was that we’d received 1300 downloads without a single penny spent on advertising. It’s important to do things that don’t scale in the early stages. I still run free bootcamps as a way to engage users, and an army of Nutrifix ambassadors.
8. Keep your focus on engagement
More important than the 1300 downloads was the fact that over 100 of them used the app every day. Engagement is the most important metric and is what investors want to see. Engagement drives retention and retention drives virality.
For this reason we don’t view our most important metric as the number of downloads or even daily users, but rather the average number of days used per week per user.
9. Demonstrate that you are able to iterate rapidly based on a constant feedback loop from users
Investors know that whatever your product is today, it will change. The question is not can you launch an app and miraculously get it right first time, but how quickly can you evolve and iterate, and that direction can only come from one place – the user.
We run constant surveys and are always talking to users. We go into offices and watch people use the app so that we can feed the information straight back to our developers.
10. For angel investors you need to communicate the scale of the opportunity and build momentum
Investors want to be involved in the next big thing, and building momentum will make them feel like they are onto something special. They need to feel like they are jumping on a train that’s rapidly gaining speed.
11. For crowdfunding, the story is just as important as the figures
As well as investing for potentially huge returns, the crowd also invests to be part of an exciting journey. It helps to be authentic and tell a powerful story about a product they understand and a market that has clear and considerable scope for growth.
12. Realise that at this stage investors are ultimately buying into you
Everybody knows that the product will evolve so at this early stage investors are buying into the problem and your ability to solve it. I believe one of the most important qualities to have, as a founder, is resilience. Knowing your why and having a passion for the problem you are trying to solve will drive that resilience.
If they believe in you, your passion for the business and your commitment to making it a success, they will invest.