Google 'how to evaluate an idea' and you will come across innumerable search results with free advice, ranging from how you identify target markets and understanding the competition, to how to stay objective using the existing frameworks in place.
Seems fairly simple, doesn't it?
The thing is, it really isn't as simple as it would seem at first sight.
Evaluating a business idea is totally different from evaluating a product idea. Similarly, having a great business strategy does not translate into having a great product strategy. These are two very different things, although a product strategy aligns itself with how you are looking to succeed in your business strategy.
At FavcyX, we have built our in-house scientific tools to help you navigate from your Product Idea towards a Product Strategy as well as a Business Plan that maximises the value of your idea.
But that is just the beginning. Let me elaborate on another interesting market gap that we look to address at FavcyX, towards the latter half of a startup’s journey with us.
We did some math, and found out that the average ticket size of an early stage investment for tech startups in India is roughly around $400,000, based on data collected over the last 5 years. And that made us think about the Indian Digital Startup landscape; is $400,000 really enough for building Digital Products and taking them to market?
Simple math might suggest otherwise.
Let’s take an in-depth look at the Digital Product costs: a high-quality CTO will roughly set you back by about $100,000 plus some equity. Add to that a team of two front-end engineers, a back-end engineer and two UI/UX developers and that would set you back by another $200,000. With the $100,000 you are left with, try squeezing in data engineers, dev-ops engineers, data infrastructure, cloud computing costs and physical infrastructure and you will soon realise the problem of this fund gap.
And keep in mind that this is just Product Development we have covered so far - we have not even spent a dollar in thinking about any sales and marketing efforts!
This brings us to the question; wasn’t angel funding all about taking your finished product to go-to market? And if there happens to be such a wide fund gap, how are digital startups managing to survive till they raise more funds? It might be rather disappointing for you to know that startups typically end up taking one of two routes:
Route 1: Building ‘Jugaad’ products that cannot scale easily
If there’s one thing Indian businesses have inherited from their forefathers, it has to be the wizardry of ‘Jugaad’. Unfortunately, most Indian Digital Products are built on legacy technology and make-shift nuts and bolts that render the technology architecture shaky and unscalable. The result? Should the startup manage to raise funds for the Jugaad Product, a large part of the fresh fundraise is re-invested in product re-jigs.
Route 2: Taking the ‘services’ route to make start making revenues to pay for the product development
Probably the tougher path to take between the two, product businesses often create separate service lines to pay the bills for their expensive product development journeys - a wasteful process, which makes the business lose precious time in a startup ecosystem as dynamic as the Indian one.
Increased returns at lower costs - the sharing economy is all about greater efficiency and at FavcyX, we are looking to bring that into building Digital Products. We realise that there are many such market gaps that plague startups in India and we strongly believe that it is almost never only the founder’s fault when Indian startups do fail. With that in mind, we hope to make a dent in the stories of at least those startups that are built with our unified shared-tech platform FavcyOS at their core.