Competitors who were awarded seed funding at the Pitch Night will develop their business concept using these funds. Challenge Owners need to continue engaging with the winners to ensure outcomes are met.
Helping winning competitors on their start-up journey
Competitors may be new to entrepreneurship and business building. The journey is risky and failure rates are high. To help reduce risk for competitors and provide them with every chance of success, make sure you engage the start-up community and experts in this area. They can assist with coaching and mentoring, which are vital during the initial stages of new start-up development.
During the validating the business concept phase, there are several outcomes start-ups typically need to deliver. These include:
- Defining Company vision and team makeup:
- Defining an impactful, bold and long-term company vision
- Determining who is on the team and their role
- Validating it is a problem worth solving
- Determining the best niche market segment (beachhead) to start with
- Defining the unmet needs of these customers and what they will pay to have their problem solved
- Validating the business concept
- Defining simple experiments to gather feedback from customers
- Developing a product mock up
- Evidence of customer validation.
There are several outputs competitors should be developing through these phases:
- A Vision Statement
- A summary of team members and roles
- User research results
- Market research results
- A Business Model Canvas
- Wireframes / mock-ups of the product
- Customer Experience journey map
- Provisional customer agreements for service
- A revised pitch deck for the next presentation.
Presentation of the partly-validated business for follow-on seed funding
When the validating the business concept phase expires, the competitors present their business concepts back to the Challenge Owner. The presentation includes their best customer-tested idea, proposed business model, and what funding will be required to further develop their idea.
It is important for winners to demonstrate progress towards their partially-validated business. This includes their continued customer discovery process which explains the customer need and confirms that their solution is solving it.
The decision about whether to further invest rests with the Challenge Owner. When determining the potential for follow-on seed funding, Challenge Owners should assess:
- what will be delivered
- how it will be measured
- roadmap + offering
You may wish to invite members of the judging panel from Pitch Night to attend the presentation.
Winners who secure follow-on seed funding
Winners who secure further seed funding will have more work ahead and will be expected to fully commit to working on their start-up. If the Challenge Owner has provided follow-on seed funding in the form of a new agreement, they are effectively acting as an early-stage investor in the start-up. If the Challenge Owner is a government agency, the seed funding may have other conditions. These are up to agencies to determine.
Once funding has been agreed, continue to engage and support the competitors as they get deeper into their start-up journey. The next phase of the journey includes:
- Finding product market fit
- Co-creating a user experience with customers through a series of minimum viable products (MVPs) developed in rapid iterations
- Identifying what the product needs to look like to be repeatable and scalable
- Developing a scalable business model
- Standardise and move from creating outcomes based on experience to developing business systems
- Use your Customer Experience roadmap to plan the shipping of an end-to-end customer experience that is limited to the core service
- Expand your sales and marketing activities to grow.
Stay engaged with your winners through this process – it's exciting and can be hugely rewarding.
Building a business is a high-risk exercise. It can be easy to spend money quickly with little outcomes to show for it. Many start-ups fail by focussing on building their idea without staying close to their customer. Help and support the winners where you can, and engage the community and experts to assist along the way.
A new agreement will need to be signed between the Challenge Owner and the team. This document could be similar to the one used for the first round of seed funds under the Closing your Challenge phase. As this document may include more details, additional considerations will need to be taken into account including further legal advice.