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Is it a big mistake to go right to a development house with an idea?

I have an idea that I have been working on for quite some time. The idea deals with VR/AR, so it's fairly new and high tech software I'm looking to build. I have done some market validation, even met with a few investors already. They all tell me that I need some sort of a prototype to show.

I have been in contact with a development house as well. The contact I have had is very positive. I feel comfortable and a connection with the people who I would be working with. They are proposing some user experience workshops and then developing a simple prototype to start. I have faith in them that they could build whatever I ask them, and I need this done quick without a lot of hassle. I also realize they are there to make money and I don't want to be naive.

I wonder, is this a huge mistake to go to a development house right off the bat with an idea?

52 Replies

John W. Griffin
2
0
John W. Griffin Entrepreneur
Co-Founder at Spiral Scout, Founder at Cutcaster, Co-Founder at Instigate Labs (Maker of Moment)
What is your other option, if you can not build it yourself? You could go to customers and see what they say about the idea and refine it based on their feedback.

At some point you need to share your idea with others and you shouldn't really be scared especially if you have a pre-existing relationship with them. Get them to sign an NDA if you want but any reputable agency will not steal your idea or they would not be in business for long.
Ignacio Bermeo Juarez
1
0
Ignacio Bermeo Juarez Entrepreneur
CEO & Founder @ TRATO | Ofrecemos Tecnología para la Gestión de Contratos con Firma Electrónica Avanzada | tratoapp.com
In any case, I would recommend to sign an NDA. No matter if the owner is your friend, a well prepared legal document will show you are serious and will always be there to protect you. Once it is dully signed, you will be able to leave all this fear behind. : )
Josh McCormack
4
0
Josh McCormack Advisor
Owner, InteractiveQA - Marketing, Web Dev, Testing, Data & Market Analysis
Provide an NDA if you'd like. It's pretty typical, though not bullet proof, and if they steal your idea, they steal it.

Of greater concern is if you're building what you really need to. Costs can spiral out of control. Developers like to develop. Keep it small and simple. Work in phases. Test it out frequently.
Mel Atwood
5
0
Mel Atwood Entrepreneur
MLM Software & Business Development
Alison,

Creating an MVP (Minimum Viable Product) is not the same as building the entire vision out. Go to the core of what makes your concept viable and start there. Far too many entrepreneurs will waste a lot of energy, time, and money on trying to build a complete solution in step 1.

Yes, get an NDA with everyone involved.

Perhaps start by hiring a technical consultant to help you spec out and wire frame your concept prior to seeking bids. The time and energy and resources you will save shopping for the RIGHT development team, will be noticeable.

Shop around. Always get 3 estimates... but 4-5 is good. It's also critical to understand that there are 2 ways of entering development. a- bid b- hourly. You need to know the pros and cons of both before starting development.

Nevertheless, an MVP is always the place to start when seeking funds.
Ilya Lipovich
4
0
Ilya Lipovich Entrepreneur
Angel Investor/Operations leader
Alison, You are not alone with your concern. I have startup founders coming to me with ideas and asking to develop everything from an MVP to a complete project every single day. It is tough to take an idea to a developer you do not know... but there are a few things you can do to protect yourself. 1. Make sure to sign an NDA with the dev house 2. Get referrals on the development house you choose. At least 2 3. Get at least 2-3 bids on your project from different companies. Here you will get differences in opinion of how they want to run the project... these will include fixed bid projects to those that are hourly (TnM) - Time and Materials. Make sure you are comparing apples to apples 4. Make sure you have someone project managing the project... someone must control the development resources no matter how much you trust them. 4. Go with an MVP to start of! This will give you a functioning product with key components which you will be able to take to investors. Once you raise your first round you will be able to develop a full blown 1st version of your product If you have further questions I will be happy to answer them. *Ilya Lipovich* Co-Founder and CEO Email: [removed to protect privacy] Mobile: [removed to protect privacy] Skype: privetik25 ?
Marcus Blankenship
8
0
Marcus Blankenship Entrepreneur
Author, Speaker, Leadership Coach
This is a red flag for me: "They are proposing some user experience workshops and then developing a simple prototype to start. "

I suggest you going through the process to figure out the smallest thing you can build, a very small budget to use, and how you will determine if people want what you have built. Take those to the agency, and do a very small contract with them to build it.

I've owned the "Agency" that people like you have approached, and we would have burned through $30k-$50k very quickly just doing design workshops and experiments. Keep it small, and put as few of your dollars atrisk at possible.
Mark Travis
2
0
Mark Travis Entrepreneur
Product Management Advisor | Speaker | Strategist
VR/AR development can get very expensive quickly. Actually, any kind of development can get expensive quickly. You need to validate that there will be a market with cash paying customers. You need to figure out what Minimum Viable Product (MVP) would be sufficient to start collecting revenue and only build the MVP. Once you start collecting revenue, your customers will tell you what they would like to see next. Focus on the pain points for post-MVP, not the low hanging fruit. Is there a way to mock up a prototype and get customer feedback? If you can, then I'd pursue the mock up/prototype path until you have a decent MVP story, then you can hand that off to the development shop as the target MVP with a deck of stories to describe the appropriate functionality. Are you technical? If so, make sure you monitor the commits each period (whatever is appropriate: nightly, every few days, ...) to ensure you are getting quality code that can be built upon for future versions. It can be expensive to throw away all of the code from version 1.0 (or really 0.9), but it's not the end of the world if it works flawlessly and results in customer acquisition. And don't forget that customer acquisition will cost you roughly the same as or many times more than the development cost. Just because you show an investor a prototype doesn't mean much. They want to see a prototype with a few paying, validating customers. Good luck!


Niraj Singh
0
1
Niraj Singh Entrepreneur
Sr. Manager- Business Develoment(BUSINESS HUNTER) | Strategic Management | IT Consultant | Connecting StartUps & Success
I suggest you to make sure the prototype on which you are working on is ready and when it comes to VR/AR it is a drive in technology.

And now a days people are trying to innovate something but not build, so, my suggestion would be have atleast one unique idea in your project. Maybe I can help you with some.
Hugo Troche
1
0
Hugo Troche Entrepreneur
Software Engineer. Entrepreneur
Think about it this way:

What will your prototype will achieve?

- Market validation. Will it give you data on what consumers want? Can you get that data with mockups and interviews instead?

- Investment. Will having the prototype bring investors on board? Will your prototype address any of the big 3 things investors look in startups - Team, Traction and Market Size.

- Co Founders. Will having a prototype attract technical cofounders?

One more nasty fact you need to consider, the first version of any software is usually is pretty bad and you end up having to rewrite most of it. Are you OK spending money on something that will have to be 80% redone in 6 months?

Each case is different, but in my experience your time will be better spend making sure you are planning to build something users want. For example, have you talked to 100 prospective users already? By talked, I mean 30 minutes interviews, not just mentioning your idea in passing.
Drew Falkman
2
0
Drew Falkman Entrepreneur
Creative Technologist | CTO | Product Manager | Innovator | Entrepreneur | Make-it-happen guy
No. Please God no. I recommend NEVER hiring any tech until you have someone who can advocate for you. That you are posting this here tells me you don't, so wait.

You will pay AT LEAST twice as much for a dev shop prototype than you will for building your own. When you are done, you may or may not have anything worthwhile.

I HIGHLY recommend hiring a CTO first. If you have the $$ to build out a prototype then you are better spending it on the right CTO who can plan out your prototype right - and then you have someone advocating for you.

Also - the bid you get from the dev shop will be LESS than you will spend to get what you want. See my article on LinkedIn for more info.
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