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Solving a BIG problem Vs monetization

I have been focusing on building platforms that solve potentially big problems and these problems surfaced from a personal experience or observation.

However, one of the platforms I am working on deals with helping folks with mental health issues. To me, it's one of those areas that's under-represented and a tad taboo.

I have been struggling with:

1) Is it a worthwhile project for VCs to look at? It will be all about ROI and acceptability of the topic dealt with. I know I have to build a user following and expand that before working on the monetisation model. I have an idea how.

2) how the project will be viewed and if it could even be a buy-out potential

I started with trying to solve a big enough problem but my responsbility also lies with making it sustainable, hence the questions.


34 Replies

Andrea Raimondi
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Andrea Raimondi Entrepreneur
Computer Software Consultant and Contractor
OK... so... speaking from personal experience here, as someone with Tourette Syndrome.

Mental health is still very much a topic that is frowned upon in many circles, it's talked even less than racial issues in many cases because it is easy to avoid people with a different shade than you, but with so many whites having this sort of issue, it is quite hard not to project. I suspect (but I could be wrong) that VCs will try to stay as far away as possible from this sort of thing. So, my suggestion is that you first check with health professionals (you should anyway) and maybe build up a "credibility portfolio" to present. That should minimise the chances of VCs going "This may be a PR disaster" or some other such line.

A
Philip S. Miller
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0
Philip S. Miller Entrepreneur
Founder at Hempies™ Paper Inc.
Don't kid yourself. Success. Philip Miller Founder OP-H Inc. Hempies(TM) Hempers(TM) Hempex(TM) People, Planet, Profit.
Shel Horowitz: Shel AT GreenAndProfitable com
1
0
I help organizations thrive by building social transformation into your products, your services, and your marketing
Yes, there will be resistance--but you can position your platform as the exciting new frontier, the untapped and very desperate market that has lots and lots of online support communities but not a lot of people have tried to monetize it.

This is something I can hep with, BTW.
Richard Alcott
3
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Richard Alcott Entrepreneur
Marketing and Communications
Hi Bernard - innovation in mental health is a big deal. Instead of going the VC route, have you considered non-equity grant funding e.g. NIH? It is an alternative funding approach designed to fund proof of concept that can lead to commercialization. Grant funding is a longer, specialized bureaucratic road than private funding, but it has an attractive upside for commercialization, non-dilutive risk mitigation.
Martin Omansky
0
0
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Any credibility in this field. If not, can you borrow some by recruiting a partner? Nothing like subject-matter credibility to validate your start-up enterprise.
Gillian Muessig
2
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Gillian Muessig Entrepreneur
COO, Board Chair at brettapproved, Inc.
Hi Bernard, For VCs, it's not really about the subject. It's about the market and timeliness of an idea. First Round Capital performed research to study what makes an investment highly successful or not. Taking over 20 years of data, they determined that the primary success factor is "an idea whose time has come". In other words, is this the right time to build this company? We THINK an idea or concept may be taboo, or uncomfortable, and so on. In truth, the idea is merely not 'in it's time.' Trying to launch and fund an underwear line of clothing for the LGBTQ community would have been way out of its time in 1950. Today, such companies are doing extremely well. VCs are given a box of money by their investors. Their job is to return a larger box of money to those people in a reasonable period of time. This is about the money. Nothing else - and I mean truly - NOTHING ELSE matters in this regard. VC groups have specialties, interests in this or that field, expertise that may be of use to one or another founder. But their JOB is to return a larger sum of money than was given to them in a reasonable period of time. They MUST focus on that. So I would ask - Do you see the signs in the marketplace that the time is ripe for this idea? There are target users - people with mental illness - and there are buyers. Buyers may be any or all of the following: parents of children with mental illness, physicians, hospitals, counselors, or anyone else who might prescribe what you are offering. Buyers may adults with mental illness who will buy your product or service. Ask: Can your target buyer afford to pay for the service? Will the target buyer immediately see the benefit and value (ROI) of your offer? How often will the buyer make a purchase? How will identify and market to your buyers? How will they learn about your product and be convinced to buy? What's your gross margin on the delivery of this product/service? Is the company scalable? - in other words, can you deliver an increasing amount of product/service at a declining cost per piece or do you have a 1:1 ratio between delivery of service or product and the number of hires you'll have to make? Mental illness MAY be an idea whose time has come. VCs will focus on the indicators that this is so. WHAT TO DO -
Gillian Muessig
1
0
Gillian Muessig Entrepreneur
COO, Board Chair at brettapproved, Inc.
Hi Bernard, For VCs, it's not really about the subject. It's about the market and timeliness of an idea. First Round Capital performed research to study what makes an investment highly successful or not. Taking over 20 years of data, they determined that the primary success factor is "an idea whose time has come". In other words, is this the right time to build this company? We THINK an idea or concept may be taboo, or uncomfortable, and so on. In truth, the idea is merely not 'in it's time.' Trying to launch and fund an underwear line of clothing for the LGBTQ community would have been way out of its time in 1950. Today, such companies are doing extremely well. VCs are given a box of money by their investors. Their job is to return a larger box of money to those people in a reasonable period of time. This is about the money. Nothing else - and I mean truly - NOTHING ELSE matters in this regard. VC groups have specialties, have interests in this or that field, have expertise that may be of use to one or another founder. But their JOB is to return a larger sum of money than was given to them in a reasonable period of time. They MUST focus on that. So I would ask - - Do you see the signs in the marketplace that the time is ripe for this idea? There are target users - people with mental illness - and here are buyers. Buyers may be any or all of the following: parents of children with mental illness, perhaps physicians, hospitals, counselors, or anyone else who might prescribe what you are offering. Perhaps it is adults with mental illness who will buy your product or service. - Can your target buyer afford to pay for the service? - Will the target buyer immediately see the benefit and value (ROI) of your offer? - How often will the buyer make a purchase? - What's your gross margin on the delivery of this product/service? - Is the company scalable? - in other words, can you deliver an increasing amount of product/service at a declining cost per piece or do you have a 1:1 ratio between delivery of service or product and the number of hires you'll have to make? Mental illness MAY be an idea whose time has come. WHAT TO DO - Look for signs in the marketplace that people are looking for solutions, not just complaining about a problem. Look for competitors - an empty marketplace is often (although not always) a sign of too small or no market interest. Do market research - find your buyers and ask them what they would pay for your product/service and what they expect it to do for them. Make sure of your product-market fit. The short-short version of this answer is: focus on the business questions as you (and VCs) would for any business. Gillian Muessig Outlines Venture Group C: +[removed to protect privacy] S: gmuessig @SEOmom
Adam Bell
0
0
Adam Bell Entrepreneur
Connecting China, ASEAN and the world
Hi Bernard

I think the concept of taking the issues online is the best way exactly because it's not talked about much. I also think you'd need guidance from a qualified professional as its a complex area, maybe partner with a university which goes down the grant path maybe as Richard suggests earlier.

I think building the community could be easier than you think, done the right way. The US is probably strongest in this area but each country has its own way of approaching it from awkward to taboo so localisation important.

But in terms of VC interest, the business model would need careful thought. Am thinking free I'm with subscription model, and solid Scaling plan, strong team and brand building, credible guest bloggers etc. You could add referrals as an afterthought. And I'd pretty much guess you'd want a VC who's big on social responsibility, again probably after MVP from Grant or Angel.


Martin Omansky
0
0
Martin Omansky Entrepreneur
Independent Venture Capital & Private Equity Professional
Timing is important, but so is market size, uniqueness and protectability of the IP, maturity and sophistication of the management team, and the business model. Proper timing is important. But not accurately predictable. Other factors can to a great extent be controlled. Sent from my iPhone
Mike Rynas
1
0
Mike Rynas Entrepreneur
Western Artisan Countertops
Bernard,
I have spent the last 20 years as a founder, President and Director of a local Mental Health Non-Profit in the Greater Seattle Area. I believe that mental health is at the stage of development as the HIV AIDS "market" was 20 years ago. So, it is my belief that the time has come for "next steps". There are smaller web sites that survive on advertising from RX companies etc. But those companies seem to have limited scaleability to make a major impact.
I would be interested to discuss possible options in the USA market and internationally. This effort may take patience and continually look for breakthrough opportunities.
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