11 minute read

6 Reasons Your Prototype Lacks Funding

TL;DR

  • You’re too busy coding and not selling your idea
  • You aren’t talking to the right people
  • You haven’t created a cogent pitch
  • You don’t have a business plan behind it
  • Your funding sources are not diversified enough
  • You’re lacking a shiny object demo moment

Contents

PREFACE: Prototypes are not enough

I spent much of my early career coding and building apps. Some of them are still in operation, but many live in a backup somewhere I haven’t touched in over a decade. Though I learned a lot and used it in my professional work, sad to say, a lot of this time will go into my ‘life regrets’ pile right next to a faux-hawk and writing articles for software vendors.

In my prior career moves, I ran an Incubation Engineering function (not a department). It was a small team that helped to generate, qualify, and accelerate ideas to get them to prototypes. When we finally did get to coding, much of the initial domain and scope refinement was already done, but we still had to create a demoable thing that proved the value to internal and external customers. Along the way we also learned, further refined, and pivoted the direction based on feedback and market developments. We got to work on some very credible (and patentable) ideas, some of which have since become products and others fueling future iterations.

But if we just jumped to coding every time a new idea came along, we would have not seen the successes we saw. Most ‘new ideas’ aren’t ‘good ideas’ until they include a few key elements:

  • A clear and simple problem statement
  • A scope including key persona and use cases
  • A differentiating approach to the problem
  • An example of how it works

This is just to get from ‘any’ idea to something others would also be able to see as ‘good’ or at least “…worth more investment…”. Often this investment comes in the form of time, not simply funding, but both are often needed throughout the process of working out an idea (a.k.a. ‘idea lifecycle’).

Later on, a more complete definition of ‘good’ (enough to fund) must also include:

  • Validation proofs (usually quotes from potential users)
  • A business case/model (better, a few options here)
  • A ‘Cost of Goods and Services’ (COGS) detailed breakdown
  • A concise set of immediate needs
  • An ideal roadmap, outcomes-oriented not time-bound

Too busy coding, not enough socializing

Especially speaking to my fellow software engineers, we love to work ideas like clay. Fresh new projects and tools are fun; they haven’t yet amassed the same technical debt or architectural constraints existing software often drags behind it. So it’s easy to nestle into your IDE and bang away at code. You feel you have a clear picture of the idea in your own mind and can execute at your own speed. You might have even discussed the idea with others already.

But have you really got ‘the right it’ in mind? Who says, a few others, or a lot of people? Are you sure you’re not just suffering from “happy ears” (confirmation bias) in those discussions? Where is your proof that this idea over others is really worth your time? Or are you just acting in a personal entertainment motion?

I don’t mean to undermine confidence with these questions, but it’s really important to work on the most credible and critical problems in your portfolio because doing anything else is a waste of your time and skill.

The fastest way to really gain useful confidence in what’s both credible and critical is to talk with others, particularly people who benefit from your idea as either users or investors.

Not to discount the value of engineering peers either, and while their feedback can be useful as like-minded subject-matter experts in technology, their critiques can often equally suffer from the reverse of confirmation bias…“if I haven’t heard of it or it’s not my idea, by default it’s not right” (knee-jerk rejection attitude). Open mindedness and generative thinking is so rarely encouraged in formal education and organizational management that you just can’t expect it from colleagues by default.

So then the next question is, “how much talking do I need to do with people?”, but it’s not about more of you talking or to the same people. It’s about increasing the surface area of your perspective, your context on the problem domain, and diversifying your knowledge of people’s interpretation of your idea.

Talking to the ‘right’ people is about usefulness

‘Right vs. wrong’ is usually a false dichotomy in terms of learning. Sure, there are objectively more and less correct facts out there, but correctness depends on the question. A better comparison to use for conversation is ‘useful vs. not useful’. You need to know what ‘useful’ is at every point in your idea lifecycle, and in particular about conversation:

  • Is it helping to address an immediate area of need?
  • Is it identifying critical enablers or blockers?
  • Is it something you’ve already encountered?
  • Is it related but actionable at a later time?

Each of these conversation-usefulness characteristics are a good thing in that even if the answer is ‘no’, it is equally as important as ‘yes’ so that you can best prioritize details and outcomes.

The difference between conversation and dialog is that the latter has a shared purpose and direction.

People who are equally interested in ‘useful’ dialog will often be:

  • up front about their interests and scope of expertise
  • concise and to-the-point
  • inquisitive and confirm what they heard often
  • willing to think and get back to you about relevant unknowns
  • clear about their further involvement

If you want your idea to grow and do so in the most optimal manner, it behoves you to seek dialogs with people who would pay for your idea (potential users) AND people who will fund your idea (executives, leadership, investors). The higher on the ladder someone is, the less time they have for early discussions, so timing your use of their time is important too.

When you get to the people that actually are in the decision process to funding your idea, you don’t want to waste the opportunity because you likely won’t get a second chance. It’s critical to have the latest version of your ‘pitch’ at the ready, something simple for them to understand so that you earn their interest for the rest of the dialog.

Creating a cogent pitch

“Cogency” - the quality of being clear, logical, and convincing; lucidity.

A cogent idea pitch is clear, logical and convincing. It should not depend heavily on prior or assumed knowledge unless you know for sure that you are talking to the specific audience for which it is intended. It should not be overly packed with ideas but rather be something that can fit in someone’s head easily. An great pitch for your idea starts with:

  • Who it’s for and what challenge(s) does it address
  • Why it uniquely fit to solve those challenges

Everything else about you, the idea, the approach, the broader goal…all of that is later. Your audience needs to know what the impact of the idea is, then they’ll be more likely interested in the next few moments of the detail.

Example from Growgistics.io

“Accelerating useful tech for independent farms”

  • Who: “independent farms”…not BigAg corporate-controlled agriculture
  • Challenge: “usefulness of tech”…farmers are too busy to guess and waste time/money
  • Unique: “accelerating”…not simply running at status quo

Of course, this is simply a tagline/messaging and requires more detail, simplified for the discussion, but it’s a way to ‘hook’ people into your idea initially. You will need the next set of words at the ready too, but this takes more work to figure out most ‘right’ ‘useful’ next words, which brings us to the deeper homework of a business plan.

Work out what the business plan options are

There are a lot of frameworks for developing a ‘business plan’. One of the ones that has worked well for me in the past is called ‘lean startup canvas’. In short, it splits areas of concern up into nine sections that force you to think about your idea from critical business angles.

Example of a lean startup canvas (From leanfoundry.com)

You’ve already got the first few boxes addressed, the ‘Problem’ and ‘Early Adopters’ from your elevator pitch, maybe even the beginnings of the unique value proposition too. And very likely you’ve already banged on what you think the solution is too. Though the optimal next boxes are relative to the way your own brain works and the nature of the idea, I’d suggest the following as nexts for people new to filling these things out:

  1. Existing alternatives - have others already done what you’re doing or close?
  2. Unfair advantage - how will this not be easily duplicated by others?
  3. Channels - how will people know or be introduced to the thing your idea results in?
  4. Revenue streams - how will you monetize your idea across key channels, or alternative fundings?
  5. Cost structure - user cost is later, operational cost is first…how profitable over time?

Sometimes filling a canvas like this takes less than an hour, but sometimes it takes days. Try and get good at this because it will increase your knowledge of the space your idea will have to operate in, even if it’s just best-guesses and speculative research. Either way, you’ll sound (and be) more informed than if you hadn’t done this work.

In fact, I often fill out multiple lean canvases on particularly potent ideas. If you only have one option, you really don’t have options and look like you haven’t done enough work to find an optimal path for your idea.

Limited funding sources, low diversity of input streams

As stated before, ‘funding’ is often thought of as monetary but also includes authorization (or at least demand) for time spend. In my prior job, someone said “funding is the only thing that matters”, specifically because without funding your thing will be replaced/cancelled in favor of something that IS funded. Key sources of monetary funding include:

  • budget approval from executives (requires gravitas)
  • budget reallocation from other projects (to yours)
  • investor capital (not usually without exec sponsor)
  • bootstrapping (your own money/budget)
  • external grants (must qualify)

While monetary funding ultimately dictates what has more resources, there are other forms of ‘funding’ I’ve experienced. Time is money, somewhat. For the purposes of clarity, I’ll call this ‘time-funding’. Your idea may receive time-funding from you, other at-will contributors to code or resources; but one of the most important time-funding sources is the conversational pool you fill with other people.

These conversations expose people to your idea, people who probably know more people than you. You should always leave an ask open to the people you encounter to refer you to others they might think would entertain a chat about your idea.

If you are a full-time employee, you may also look for time-budget opportunities outside of normal business hours. Just be careful not to mix your corporate apples with your personal oranges. In general, anything you do under the directive of your employer or using employer resources can be considered intellectual property of the company, not you. If your employer doesn’t do ‘innovation days’, effectively time-boxed scheduled time to do improvement work and “think different” projects, you should ask about it.

If there’s zero space or appetite in a full-time job to pursue your idea, well, you’re not on your own. You can still put in after-hours to your own projects and engage people about it, so long as you do that outside the scope of any full-time employment or non-compete agreements you’re in. If people are still not getting it, you might want to step back and ask them…

What’s missing, something visual or something more fundamental?

Lack of shiny object moment

Believe it or not, people (you and I included) are fickle creatures. We are inundated by asks all day and deluged by useless information all day long. Sometimes the best thing to solidify your idea in the minds of others is a ‘shiny object moment’, such as a demo UX element that highlights the key competitive differentiation in your business plan.

A healthy example is from my local friend, Sam Huddleston, a developer and startup founder who built an interactive map based on data predictions about where endangered species show up in the ocean. This data is used by large commercial fleets to avoid risks and regulatory fines using near real-time re-calculations of logistics and distribution plans. His ‘shiny object’ moment is that, from any browser, you can pinch-and-zoom on an interactive global map with this data overlaid along with future predictions and suggested optimal routes. Sam and I can talk all day about complexities in the data, training machine learning, and DevOps pipelines to re-deploy, but the thing that often causes program executives to invest is the 15 seconds of touch screen savvy UX.

If you’ve really gotten to the core of what your users need desperately, it’s often apparent as the key sticking point in your demos.

Conclusion

None of these dynamics are set in stone. There’s no ‘physics of success’ with prototypes, other than when they get you to the next funding cycle. Yes, they’ll need to be re-written with proper coding standards and requirements documents, but this wouldn’t happen without the interest, demand, and funding a dialed-in prototype provides.

No matter what role you play in the process of prototyping, coding or executive funding alike, it’s important to be deeply invested in asking what, how, and why the idea is BOTH worth pursuing AND capable of being accomplished. Your conversations with others are one of the best approaches to answering these aspects of your ideas and prototypes.

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