You probably know that an innovative idea does not always make for a successful business. Laura Steward learned that lesson the hard way. She left her high-paying job as a commercial leader at General Electric Healthcare to develop a virtual time capsule—a mobile app in which people could record videos of themselves and schedule the footage to be sent to their loved ones at a later date. Turns out, even those who wrote her a US $100,000 check to support her venture weren’t using the app. That’s when she realized she made a rookie mistake: She quit her day job before proving that her business idea would work.
Mayasari Lim founded SE3D, a startup in San Francisco that develops 3-D bioprinters—which can re-create live cells—to be used in classrooms. She left a stable job in academia to pursue her venture.
Steward and Lim recognize the importance of ensuring there’s interest in your product or service before stepping out on your own. They shared words of wisdom during the 19 April IEEE Women in Engineering International Leadership Conference virtual event about disruptive technologies—which was live-streamed. The event covered how to evaluate whether an idea will succeed and where to find funding.
WHEN THE GOING GETS TOUGH
Steward’s company, VideoFizz, based in her hometown, Kansas City, Mo., has come a long way since her original idea of a time capsule. It’s now a mobile app for family members and friends to record a video greeting from their smartphone, and embed video into a virtual greeting card for birthdays, anniversaries, graduations, and other occasions. But in the beginning, Steward was so convinced her original idea would succeed that she “left a cushy and comfortable job, and that decision was wrought with disaster.”
When she joined a fellowship in her hometown designed to help entrepreneurs get their ventures off the ground, she was feeling confident that she knew how to run a business but just needed some help with funding. During the first day of the fellowship she was asked to explain how she validated her concept; something she had never even thought to do. Validating requires finding out through market research or selling a prototype version whether people are likely to actually pay for your product or service.
“I was in tears the entire day. I’d quit my job at the pinnacle of my career, and I didn’t even know whether anyone would want my idea,” Steward says. “I felt this overwhelming sense that I wasn’t prepared.”
When she tested her idea with potential customers, she found that people viewed the video time capsule idea as morbid. After spending $250,000 to design the app, she didn’t have a single customer in two months. “After validating my idea, I pivoted the concept to something people connect to.” VideoFizz now has more than 50,000 paying customers and is growing.
Lim left a stable career as a biomedical professor at the Nanyang Technological University, in Singapore, to launch her bioprinting company. The printers are designed to be used for research and experimentation in classrooms. She says she felt her idea was validated after she applied for a grant from the U.S. National Science Foundation and received it.
But having the NSF view her venture as worthy didn’t mean the general public would do the same, she notes. “The toughest part of building this business is educating people about what bioprinting is and the opportunities it presents,” she says.
The schools that purchased her printer as soon as the company launched in 2014 were early adopters. She started facing hurdles when she tried to expand her customer base. Many schools simply could not afford the printer.
Both entrepreneurs say it’s important to pursue what they call “smart money”: accepting funding from the right sources. “If someone offered me $1 million but wasn’t invested in my business or didn’t have experience in it, I wouldn’t take it,” Steward says. “I look for people who can offer more than just money—which is a lot harder to do.”
Steward and Lim agree that strategic funding partnerships help take a business to the next level. It’s important to be cautious about which investors you bring into the company, they say, and to get the timing right. Steward had the opportunity to pitch her concept to Google Ventures early on in the app’s development, but the product wasn’t ready. She adds, however, that if the stars do eventually align, a startup can get off the ground quickly.
Neither entrepreneur has tried a crowdsourcing platform, though Lim is toying with the idea of using Indiegogo to raise funds for schools so they can purchase the printers.
Lim says she isn’t concerned about larger competitors offering similar products. “If someone wants to be in our space, it shows there is a demand and interest for the product,” she notes. “We just have to be better at defending what we have and the value proposition we bring to the market.”