New Web and Mobile App Startup

[SportsFan438]

I am in the process of starting a sports fan website and mobile app, with a check-in feature, user-interaction, and sports news updates. I am fresh out of college with a degree in entrepreneurship and excited to get my first venture off the ground. I have been working on this project for several months and am finding out how little I know, and how different real world application is, compared to reading it in a textbook. As a young entrepreneur I want to gain as much knowledge, so I can avoid as many "first time mistakes" as possible. I was wondering what advice experienced entrepreneurs would have? Also if I want to approach experts in the industry I am going into, where is a great place to start?

Thanks in advance for any advice.

 

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[cliqflip]

How are you going to get the mobile application made? Freelancers or a local company? Also did you already acquire funding for this ?

 

[SportsFan438]

We received funding for the application and website from the triple F's and are now putting together an investment presentation to pitch to outside investors. We are fortunate enough to work with a U.S based Developer with a lot of experience and an impressive client list. With the check-in feature of the app, it was important for us to have a U.S based developer for testing reasons, but we certainly paid much more than if we would have gone with someone overseas. Part of the deal with the developer was giving them membership interest in the company, we felt this would help incentive them to help us succeed, and perform changes/maintenance after the project is completed.

 

[Gold777]

How is your app better than or different from, say... these apps?

Apps For The Sports Fan: iPad/iPhone Apps AppList

Or

Top 10 Mobile Sports Apps

Those?

How will you monetize it? What separates you from the competition, why should investors be interested in your venture, and how will you gain traction?

 

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[SportsFan438]

Thanks for the reply.

Certainly great questions to ask ourselves. Our app differentiates itself, by using a reward based system for actions done on the website/mobile app, such as checking-in. Our goal is to reward sports fans for being loyal to their favorite teams and athletes by using incentives and providing a platform for them to be recognized as loyal fans.

As far as revenue streams goes, our largest one is through working with merchants. We provide them a free service (market research/ customer analysis), and allow them to upgrade to a paid service, which provides further "contact" with users.

As are product is still in development it makes it harder to pitch investors, but looking at the size of our market we feel our website/app fills a need not currently served. The market is large enough, that the payoff could be significant if we are able to execute our plan. As far as gaining traction, we have put together a marketing strategy, that entails working with partners, using social media/online advertisement, and other offline activities.

 

[Gold777]

Sounds like a pretty cool idea, could work. There's already things like foursquare that do just that, and sport bar apps, etc, but maybe (and hopefully) you're going to do something that none of those guys are doing at all. Something 100% new and creative.

Also, you know pitching to investors while your product is still in development isn't going to work right? Unless you went to Harvard, worked for Google, Paypal, eBay, Sony, and other similar companies, investors will NOT be investing in your concept or product before it gains traction. When you can show good traction or good revenues is when investors will invest. Even teams with a ton of experience and accomplishments have trouble doing that.

Trust me I've literally talked to hundreds of investors, and I speak with a few angel investors on a regular basis. So don't count on that happening anytime soon until you can actually show some proof of your product getting off the ground. Actually, don't even think about getting an investment, and definitely don't depend on getting one.

Start writing your business plan if you haven't already (you actually don't have to write it now but it would be a really good idea to do so). Then update it every once in a while, and once your site is up and ready to go, toss it on a site like AngelList and see if investors are interested. I can guarantee you they won't invest in the stage you're at right now but stay in contact with the investors and keep them updated until you gain some serious traction.

 

[SportsFan438]

Thanks for the advice.

Ive been reading a lot about foursquare lately, and how they are valued at $500 million, but dont have a revenue model. While taking aspects of foursquare and applying it to a niche market, we have also come up with a feature that builds on the check-in model, and can bring in revenue. We are also implementing features that aren't exactly "new", but are combining them together to create an enhanced user experience.

I agree with you that we should not expect any outside funding, until we have gained users and proven we can create profit. My goal with the presentation is to present it to investors on sites like gust.com to get feedback, along with gaining contacts, so further down the road it will be easier to approach them about investing.

 

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[Gold777]

You're welcome.

Yeah foursquare had a very high valuation before they even made their first pitch, why? Because they gained a lot of traction. Now it's just a matter of finding out how to monetize it, but the potential is clearly there which made investors want to get in early, same thing happened with Twitter, etc.

If you could get similar traction even on a smaller scale, then there's no doubt about it that investors will be interested and even invest. If your revenue model works and the way you monetized the check-in feature goes smoothly then you have a pretty good company on your hands.

Yeah Gust is another great one, that works as well. Sounds good, just focus on the product and executing your marketing plan/gaining traction, and go from there. Yeah really though, develop the company and product as if you won't get funding for a long time and you'll be much better off. It's better to dive in thinking you will find a treasure at the bottom than to think you're diving into a pool of gold coins. Because if you go with the pool, you will likely end up swimming in disappointment.

That's my 2 cents, hopefully someone else can chip in too.

 

[SportsFan438]

Thanks again,

Had a quick marketing question maybe you could help me out with. Our overall target market is all over the U.S, but our initial target market is only in individual cities, or at this point only one individual city. Would it be best to put all of our marketing budget into this initial city and let everything else grow organically, or would it be best to try to initially capture a large percentage of the overall market? In my head it seems like it would be best to only market in the cities we enter, because one of our key features is location based, but there are alot of other features that we offer that can be used by anyone regardless of location. With such a small budget we have to make every dollar count.

 

[Gold777]

It would be both better and ideal to start locally. Once you're in one city, you can use that as leverage to get into other cities. However, which function do you value more? The local features or the global features (being able to use it regardless of location)?

It's completely up to you, what you feel would be best and how you plan on marketing it should give you a pretty good idea of which route you should go.

 

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