Things I wish I knew before founding my mental health startup
medium.ikuznetsov.com
medium.ikuznetsov.com
You don't need 250k to 300k, and if you had it you'd wish you had 500k or 750k anyway. A longer runway puts off the scary point where you have to launch something. You can bootstrap a startup with very little capital if you have the skills to do the work yourself, or you have co-founders with those skills, or most importantly you're happy for things to take longer. You don't need PR or bizdev either if you have a wide network or good creative skills for generating marketing chatter. The idea that you have to buy that is nonsense. Very few early stage startups hire in PR in my experience.
Point 4 is right though. Raising is a full time thing that requires focus. You pretty much have to stop working on your business to raise a round. That's a big part of the risk of doing it, and one reason why it's far better to have more than one founder.
Spending a quarter mill on a prototype seems like a horrible decision, TBH...
Well, if you're spending significant resources upfront on content from accredited professionals for a mental health app...you're probably doing it wrong.
The problem in the mental health space isn't the lack of information, or access to information...
I'd rather have something with a brutal/nonexistent GUI but provides useful functionality and gives me a warm fuzzy that the developers have some use cases in mind, or a suggested workflow.
Yes there is a first-mover advantage to getting into a domain early.
But how long are they actually using the half baked prototype?
I thought the purpose of the half baked prototype was to validate the idea, get good user feedback and get as much information as possible before dedicating resources and making more permanent design/architecture choices.
If you are spending massive time and resources before this is achieved, you are doing it wrong IMO...
If you can use Excel spreadsheet or Google form to build your product. Do it for your first 100 users.
Obviously if you're in deep tech then this doesn't apply. But with deep tech and moonshots the value isn't the product, it's your arbitrage opportunity and expert patentable knowledge.
You need to have a MVP in the target market. You need to demonstrate that it can scale. Therefore, if your business model works for 100 customers on the web, it does not necessarily mean that it will be successful on a larger scale on mobile.
Time === money.
If you're doing it, or someone else is doing it. You're paying.
You can sometimes choose to sell time for money or use money to buy time, but not always. If nobody’s willing to exchange their money for your time then your time doesn’t equal money.
Opportunity costs are real.
So if you're executing the mundane and the outsource-able, while the heavy lifting sits idle...that's foolish. It's the road to ruin.
Time is money.
Amen. It's such a common problem. And one I totally get. The first possible MVP is so far from a founder's vision that it's very easy to say, "Well, let's just add X". And then repeat and repeat and repeat.
More than a decade ago I was the technical cofounder for a former colleague. He had an idea that was really compelling at the time, one for whom the key engine of growth would be Facebook sharing. He quickly raised $1.2m from some name-brand VCs as a seed. We both had strong backgrounds in user testing, so we looked vigorously for ways to find out if our approach made sense to users.
He hit upon the idea of getting people off Craigslist under the guise of market research. Before we had built anything, he'd bring people in and have them try out a few different sites and give opinions. One of them was Facebook, which they'd log into using their own account. But what they didn't know until after was that we used Greasemonkey to generate fake newsfeed entries supposedly from their real friends.
One of our key assumptions was around viral growth, so we wanted them to react positively and possibly try to sign up for our site. What actually happened is that most people hated it. We tried a bunch of variations and they still mostly hated it. So we went to our first board meeting on Sand Hill Road and told them that the thing we all thought brilliant 6 weeks before was actually a bad idea and we had data to prove it. They were... nonplussed. Happily by then we had our next idea ready to pitch so they didn't murder us or anything, but I did worry.
The thing that we didn't learn until later was that two other companies had pitched and gotten funded for basically the same idea at about the same time. Between them they raised something like $12 million. And I forget the details now, but each of them persisted for something like 12-18 months longer than we did before they gave up.
I'm convinced that raising less made us more aggressive in our testing and more willing to pivot. And even if it didn't, I still take pride in wasting way less money on dry holes.
"Right now, $300,000 is not enough to create a prototype and show traction on the global market. It’s a simple math. Let’s say you need three developers."
That's not simple math - that's faulty assumptions.
While there are always exceptions, you don't typically need to hire 3 developers to build a prototype!
The biggest thing missing from this article is customers - who are they, what do they want, and how much will they pay?
...then you shouldn't start a software-based business.
It's trivial to spending essentially unlimited sums of money building products no-one wants - I've seen it done with tends of dollars and millions of dollars.
However, that has very little do to with building a successful startup - where at the end of the day what matters is customers and revenue, not lines of code.
However, prototypes often don't show any traction. In addition to developers, you need marketing, design, and other people. Thus, three developers is just a simplification.
My main point is that the current market is highly competitive, and products are becoming increasingly complex, so more money is needed to reach our first customers.
Trying to improve mental health using an app is like trying to cure alcoholism with vodka. Societal addiction to devices is the reason why we've had an explosion in mental illness.
Now, we are more intelligent and the average person knows better than to downplay mental health challenges.
It's not clear to me that there's a mechanism to link this to the higher rate of diagnosis hypothesis. The authors instead link it to social media.
https://www.ourherd.io/ has had really strong feedback that it has had a positive impact by actually being a social app tailored for mental health…
I feel like pre-seed funding should support or be for 4ish people tops. Around the max number of co-founders.
If you're pre-seed you basically have no product yet. Should you really be hiring biz dev, PR, 3 programmers and other team members at this point?
The market wants me to have )
Typical pre-seed in our space is 1,5-2,5mio. Pre-Seed!
I remember good old times when 100-150k was a decent pre-seed round. This inflation is crazy.
> The market lives in an atmosphere of inflated promises... Anyone who can only tell the truth about their projects will not look ambitious and convincing enough. Nobody will invest in those projects.
Agree? Disagree? I personally have limited experience but tend to dislike startups that oversell and promise lalaland with nothing to back that up. Not every startup is like that imo.
* "we're actively developing this feature" means it'll be available in a few months
* "we're designing this feature" means it'll be available in 6 months to 2 years
* "this feature is part of our vision" means it may never be available
So if you have a feature that you're planning to release in a week or two, you can't just call it "under development" and expect customers to understand. You have to emphasize that it's practically right there, it'll be ready long before you need to do anything with it, and by the way here's a slideshow of what we'll have available next month when you want to go live.
I don't want to come across as overly cynical, but I feel like there is a natural friction between this competitive advantage and certain domains in the health and/or critical infrastructure space, especially when "moving fast" can be at odds with quality. Safety-critical and regulated health domains don't seem like areas where moving fast is always viewed as an inherent good.
Otoh, going into the labor market and trying to buy a team is not really a traditional early stage startup activity, in the sense that you'd normally expect the founding team to take this on and pay themselves a minimum living wage. At least in the startup bubble, the concept seems to have shifted from bootstrap in the garage to get money and buy everything, while also producing job security and career growth and the other stuff generic labor market participants want.
I do agree, the worst idea is to try and underpay or use (truly) unqualified people
UX can be iterated on when you're working on something tiny and (I assume) simple as this app.
In the coming months, someone will build the same capabilities (possibly more) backed by chatGPT or other chatbot.
AI is pretty helpful right now (I'm proofreading my comments with Notion AI as we speak), but I think it will take a couple of years to really deliver quality output. I'm eagerly awaiting this moment.
If you don't have the skills or co-founder(s) to get a prototype off the ground with ramen money, that should be your #1 goal. Or, if you really hate that idea and want to pay other people to develop things for you, at a minimum look at paying developers in cheaper places to do it so you can at least vet your idea for a low price before going all-in on expenses.
You talk about hiring developers, all kinds of marketing strategy... do you know anything about mental health? What makes you qualified to run a mental health company? Where do you discuss bringing in doctors, or mental health specialists, instead of FAANG devs? Is the "health" part just an afterthought?
> investors may not be impressed by the quality of your product
yea, when the founder doesn't seem to think that mental health expertise is important for a mental health startup, investors might be unimpressed.
> It’s ok to mention in your presentation that you have people with FAANG experience in your team
Maybe mention people with, you know, mental health experience?
Even your web site only refers to questionnaires and approaches "approved by" mental health professionals... No claims you have even a single one on staff.
Some fintech washout thinking he can immediately pivot to health of any kind, I hope people can see you for being the total fraud you are.