Haltian Startup videos with Pasi Pentinpuro are back with the third video that is all about How to get funding!
What things startups need to consider when they start thinking about funding their product development and design process? Pasi Pentinpuro, Haltian VP of Product Development Services, tells you how the product development phase can get you funded.
As with many of the Haltian personnel, Pasi’s background is at Nokia, where he ran different cellular phone programs for about 20 years. For the past 6 years Pasi has been head in the product development services at Haltian, with several extremely success startup customers and over a hundred different types of project with smart devices.
Funding is always in the minds of every startup
“The first thing you need to consider is that you will need a lot more money than just the product development. Things like setting up sales, branding, marketing, logistics, manufacturing will take more money than the product development.” Pasi begins.
The bad news is that you will need quite a lot of funding for a successful product development project and product launch, but the good news is that there are usually many avenues to get some. In many countries, the government will provide funding for startups, so looking into those options is always a good idea. Then there are also other types of paths to funding, like investment companies that you can present your ideas to. But you need something impressive to show any potential investors.
Concept study will help you impress investors
“We have helped a lot of startups to get off the ground and we have quite a few success stories there. The first thing that we usually do once you have your initial funding, we offer, what’s called a concept study phase.”
So the first step of any product design project is the concept study, which basically means making the a detailed plan for your product. The deliverables of the concept study are:
- determining the main components
- product size
- product design and looks
- the materials used
- product price
- …and how much is the total development cost
Pasi stresses that the concept study is something that needs to be done in every project, so it is not an extra step in the process.
In terms of how to get funding, the concept study is a great tool in impressing potential investors.
“As a result of the concept study, you’ll get very good documentation of your product and how it’s going to be made. And you will also get a mockup of your product.”
A mockup shows that you have a solid plan for your smart device
A mockup is usually done with the concept study. It’s a model that doesn’t actually do anything, but looks like it and gives a good indication of your product idea.
“With that documentation, whit the mockup, when you go talk to potential investors, it’s usually a much easier sell than just with only the idea.” “You’ll have a believable plan to present”.
A working prototype is worth a thousand words
Next in line in the product design process and in securing further funding for the project, is the prototype stage.
“We make the first prototypes that will function as the final product. They might not look like the final product, but they will be very close.”
In this stage the least, any potential investors can understand the business idea behind your product. “A working prototype is truly with a thousand words. Especially in cases where your product idea has some technology that is unproven.”
With these steps in the product development project, you can impress your potential investors, and get funding all the way to mass production!