It’s execution that’s worth money. You’ll drive a solid valuation if you get the right team together to deliver a product that users love to use. Do that and you’ll be worth $1 million. If you do that very well, you’ll be worth around $4–5 million1 – the average valuation of a funded startup at this early stage.
Investment • You’re investing your own blood, sweat and tears at this point. If you nail your idea, team, prototype and some users, then someone will probably be happy to give you anywhere between $250,000 and $1 million in exchange for owning a percentage of your new app company.
Rather, there is a remarkably common set of tactics and strategies that the top entrepreneurs – especially the new wave tackling the mobile challenge – all share
The start of any journey to developing a hugely successful app business is a billion-dollar idea and a dream of making it big. Through this first part of the journey it’s all about validating your idea, the market, your product, the basics of your business model – and putting together a plan of attack. You’re putting together an end-to-end plan for your business, and supporting it with research, data and innovative thinking. At the end of this section you’ll have real customer validation and metrics, and be confident that your basic app will become a business. The ultimate validation comes when experienced people buy into your vision and invest money – whether those people are friends, family, cofounders or investors. Once you’ve combined your huge idea with a huge market, it’s time to find a cofounder. It’s worth considering now because the earliest days of your app are about challenging, distilling and refining your idea into a service, into an app. For just about all of us that is better done in the context of a team – a team most powerful when complementary skills are brought to the table. The next step is creating the identity for your business – its name, brand, style and first designs. This is the genesis of your app: what it’s going to be called, how it feels and how it’s going to engage people in a very strategic way. Once these big questions are answered – and decided upon – it’s a lot easier to move to the prototyping phase. This is when the app itself takes shape: you start thinking about details such as precisely what every screen looks like, what every button does and what service or experience you want to deliver to your users. Finally, it’s about validating your app with users – in the real world – and starting to gather objective feedback. It’s about measuring – with numbers – how much people love your idea, how much people love your prototype, how much time they spend using it – or how much money they would spend on it.
If you’ve been able to bootstrap your way to this point – existing on the smallest amount of money possible probably while holding down your day job or living in your parents’ basement – then you’ll be close to justifying a million-dollar valuation for your app. That’s real objective validation. That is the basis on which people will invest in you – and your idea. That is the beginning of your company.
If you can convince the last group especially, you’re probably on to a good thing
How Badly Do You Want It? This book is not a simple ‘how to’ guide about building a billion-dollar business. It would be naive to think that you could encapsulate everything required to deliver such success in a single book. Going through this journey has opened my eyes about how complex, lucky and tenacious you have to be to make it to the very top. The most important question you can ask yourself, as an entrepreneur, is, How much do I want to sacrifice to achieve success? Everyone wants to be successful, everyone wants a multimillion-dollar exit, everyone wants to be well respected for what they’ve achieved. Not everyone, however, is willing to work 80-hour weeks, or be told by everyone they meet that their idea won’t work and still persevere every day, or constantly sell their idea to every person they meet to build up their team, or work through mountains of legal documents late into the night, or spend months chasing investment to keep their idea alive. Understand from the onset that it’s a hard – and long – fight. As we saw earlier, if you’re going to reach a billion-dollar exit for any tech startup it’s going to take you on average seven years.1 So buckle up. If you’re willing to sacrifice and persevere, then it will be the most exhilarating journey of your life.