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Strive not to be a success, but rather to be of value. - Albert Einstein
Our first Incubator Light Program entered week two running with a quick recap and then straight on to the meatier content. This week we turned up the gas with increased cognitive activities.
Our incubator light program is an 8-week course to facilitate projects to become more eligible for funding. The initial meeting together, firstly, provided an opportunity to introduce ourselves before launching into VC incubation, starting with the Value Proposition, Journey Mapping and Prototyping.
We started off with a look at Alberto’s Journey map, the completed work was a tapestry of ideas really thoroughly thought out and a great piece of self-analysis.
The Journey mapping process explores the end-to-end steps that a customer will go through to discover, buy, use and refer a product or service.
Understanding this process allows for a proper project valuation helping to refine your story and demonstrating how your business functions. It was great to hear that the mapping process had provided insights into the participants projects that they had not previously uncovered.
How low can you go? When it comes to value, it is important to ensure that your development process is carried out at a minimal cost. How detailed do you need to make your product demonstration to transfer your knowledge into the minds of the investors? Do you need a demonstration website or a sketch to start getting customer feedback?
Ultimately, you need to showcase your business opportunity to investors, and having a product demonstration allows for design to visually explain the technology you have developed and add that visual UI to your code. Having a clear demonstration model can correlate and highlight your customer validation explanation and is often the lightbulb moment for investors to make the decision on whether they think your idea will work for them.
"The aim of marketing is to know and understand the customer so well, the product or service sells itself." - Peter Drucker
TAM SAM SOM
Being able to precisely and accurately place yourself in your appropriate market will help investors not only see that you are diligent but understand financial potential of your project.
Generally, markets are broken down into Total Available market, Serviceable Available Market and Serviceable Obtainable Market. In the Web3 industry we see projects having difficulty with valuation and market understanding mostly due to the emerging technological industry that is Blockchain.
It is important not to overvalue your project, and have reasonable and accurate figures to base your valuation upon. Usually, projects work within a somewhat closed ecosystem with limited tokens defining the market space. For instance, if your project works solely within #EOS then you can begin to measure the Total Available Market, based on number of users, amount of token holders, price / market cap & other similar businesses valuations.
There are often library's of projects or DApps on each network, which you can analyze to reference whether or not you will be the only project providing a type of service. You may be able to gain some data insight from the DApps that exist to see how users interact with current projects, and then more accurately map out your Web 3 valuation. How much of the Available market will you be able to obtain with your project?
Discovering the type of model that defines your customers and how they interact with your business is an important aspect to consider when valuating your project. Will you be running a free to play game with in game NFT transactions? How much does it cost to take your customers from not knowing about your business to starting to play?
Customer accusation cost generally should go down over time giving your more headroom to invest further in marketing. With refinement, your customer journey will be intuitive to the users and easily explainable to the investors. Having a good grasp on how you will reach your income generating user base will show the investors that you have a strategy for success, but also demonstrates you understand that this process is fluid with time and development.
For example, your customers are arriving to your project site via Twitter ads, this costs on average for your business $0.5 per visit. The issue is that they do not then go on to download your DApp. With some simple tweaks to your landing page, you may be able to have a greater conversion rate.
Showing that you are planning to adapt your customer journey with calculated foresight will help demonstrate to the investors that you understand your audience and cost of accusation.
If you would like to join a future Helios Incubator Light program, you can sign up via our founders button below.