I met Paul & Jon via CoFoundersLab in earlier this year. I’d just moved from Toronto to Manchester and was on the hunt for an interesting opportunity. They were on the hunt for a CTO, and had a few ideas that they were trying to narrow down. It seemed like a good fit, so we started to explore the list.
We took a very unique approach to settling on a business that we wanted to build….
We dated the ideas.
It wasn’t easy to do, our biological (financial) clocks were ticking, and it was awkward at the networking events when fellow entrepreneurs paraded the trophy wives (businesses). Our moms (our wives) were losing patience, they wanted grandchildren (money) soon!
We fell in love with our first idea. The “AirBnb for tour guides” was sexy and exhilarating….it would be so much fun dogfooding this business. But as we dug into the competitor research, we saw a series of start ups that tried and failed with this model. Our concerns about the market size were confirmed when we spoke to founders of these failed businesses…turns out that the cost of acquisition was much higher than what we could make. Fun as it sounded, there was just no long term future for us.
Jaded by our last idea, we got serious with the next idea. Invoice financing is 2 trillion Euro business and we decided to explore the ways in which we could modernize the industry. After weeks of research and debate we were put off by the constant pressure from invoice finance’s daddy (government regulation)…apparently we weren’t good enough for invoice finance. There’s plenty of fish in the sea….we moved on.
In all honesty, we went off the rails with the next one. Who needs invoice financing when a (vaguely described) “sport/game” idea sounded like so much fun? Why can’t we have some fun and make money too? Turns out we weren’t alone on this one. The research painted a picture of a business with a small market share, in a market that is highly volatile as competitors come and go frequently. It was fun while it lasted (3 days), but also slightly embarrassing….we hide this fling from our friends (advisors).
The list of ideas was getting shorter and the next one picked us up while we were in the pub on the rebound. Crowded House (a working title) saw a marketplace of property developers, who needed funding, and investors, who needed a return, as an opportunity. We liked this market, and the model, and we researched and refined this one for a while. In the end, the idea fell out of love with us (our customer development confirmed it was a problem that didn’t need solving).
Our last idea, and the one we’ve proposed (committed) to, is DueCourse. We love the problem (warning…pitch ahead):
Late payments cause huge issues for small businesses, most notably in terms of cash flow, and the time and effort spent chasing overdue payments.
…and we think we’ve got a pretty simple, useful, and awesome solution:
DueCourse is an invoicing tool that allows businesses to agree on a timeline of payment terms, and then get paid automatically on the agreed dates by direct debit. No more late payments, no more credit control.
Our competitor analysis, market size research, customer development and business model all checked out….and mom (our wives) like it too.
It took us longer than we expected to find a problem we liked that checked all the boxes (for each of these ideas, we generated a lean business model canvas, did research on the market size and competitors, solicited feedback from our networks of business contacts, tested our assumptions and concerns by interacting with potential customers, spreadsheeted the financials and researched the legal/regulation restrictions)….but we’re hoping that, by playing the field, we’ve picked a healthy long term relationship (business).