So it’s been a year since I first started to look for funding to get our first batch of products made and it’s been an education. I wanted to share with you who we have reached out to and lessons learnt. It might be useful for our friends in London and beyond who are looking for funding in the space of the internet of things.
1. Never fail a crowdfunding campaign
I never realised that a failed crowdfunding campaign would become a burden I’d have to carry around with me at every meeting. The fact is even if we were able to get up to £43K in January (the worst time for retail) the fact that we failed somehow was a tool that was used against us at every meeting. Even if I had really good reasons to try to raise a reasonable amount (such as financial viability), the perception of success supersedes accuracy and transparency. My advice to anyone thinking of raising funds, is go with a low objective and get the rest of your money after. It will be easier than trying to explain failure over and over again.
2. Be aware of the equity gap
When you’re trying to raise between £100K and £250K you’ll find it more difficult than if you’re trying to raise a small amount of money or crazy money. The problem is, in product terms, a small amount of money won’t get you very far. So it’s an almost impossible equation to solve. That is essentially what crowdfunding is there for, assuming you can raise enough money.
3. Telcos are where it’s at.
The world of telecommunications and M2M (Machine 2 Machine) are the most dynamic people I’ve met in the past year. When traditional investors would snif at what we’d done, they would get excited, and they are conversations I’m looking forward to pursue. No wonder Wayra is supported by Telefonica.
4. Be patient.
It took 4 years to turn the Barbie doll from an idea to a marketable product. Products take time to make, develop and find good partnerships. The problem with the investment scene in technology is this idea that everything needs to happen within an 18 month cycle, from start to exit. I still believe that doesn’t happen with products. I used to sell Arduinos from my boyfriend’s flat in 2007 when noone knew what they were and my company was the only distributor in the UK. I feel like I’m back in that flat a little bit, but that’s ok. Things happen at the pace they are supposed to.
5. Keep talking
I continue to receive incredible promotional opportunities, emails from retailers and potential customers signing up to our newsletter and emailing me with their stories. Obviously we’ve struck a cord and that’s what will keep me looking and keep me hungry. It’s not 100m sprint, it’s a marathon.
6. US vs UK
This is just a last note to say that if we’d have been based in the US, there *a chance* we might have had more luck with funding as investors don’t like investing in companies they are too far away from, but their reasons for not investing have been more or less the same everywhere. So really, it’s all the same right now.
7. So what are the reasons?
The thing about the internet of things, is that it’s about a thing. A thing isn’t enough though, you have to come up with a roadmap of many products, and a way of growing the marketplace that is very clear. If you can’t well, it’ll be harder. We’ve developed a whole line of products & add-ons which we’re pretty happy with. We’ll see what happens in the coming months, but to think beyond the first product is probably my most important learning.