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So You Have the Big Idea - Now What?

So You Have the ‘Big Idea’ – Now What?

What’s your big startup idea? Building investor interest in a genuinely new product or service presents a unique challenge. It’s difficult enough when your startup is tied to a recognized, established industry or profession such as healthcare or clean energy. Carving out a new niche in an established field is subject to tests and measures for which there are precedents and histories that the equity investor can look to in determining the odds for success.

When your startup is an enterprise that few if anyone other than the entrepreneur has even thought of before, how do investors begin to gauge these odds? In the beginning, how did Larry Page and Sergey Brin sell the Google business model, and how would an investor react? I can hear it now: “You wanna do what?”

To such reactions, I often quote Albert Einstein: “If at first, the idea is not absurd, then there is no hope for it.”

Govlish grows out of my experience as a technical writer of government documents, which began in 2003 at the Law library of Congress and includes assignments at more than 25 government agencies, primarily in the federal government but including state and local jurisdictions. Government cannot be understood without a good grasp of its thousands of unique terms, and I began making lists as I encountered them, including acronyms, initialisms, codes, cryptonyms, abbreviations, aka’s, dba’s, “backronyms,” and namesakes.

James Madison once said, “A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy; or, perhaps both.” Govlish is dedicated to preventing the farce and tragedy that Madison so feared.

By 2011, I found I had aggregated about 1,500 such terms, all placed in the context of their sources, and my research revealed that nothing else like it exists inside or outside of government. Little did I know that that was just the tip of the iceberg. Database expert friends advised that I had something of great value, and that year I began working on Govlish full time. Our databases now encompass more than 100,000 such terms, about 30,000 of which are federal and the remaining are state. From our databases, among other things, we can construct the most complete taxonomy of the federal government anywhere, as well as countless folxonomies (a classification from user-generated tags). No one else is capturing this data. We also provide pronunciations where a term is said as a word rather than its individual letters—another valuable service that does not exist anywhere else. For example, F-O-I-A, for Freedom of Information Act of 1966, pronounced as FOY-uh.

When the user searches for FOIA, our app and web site will also include an MP3 audio file that sounds it out as the word, so they can actually hear it. If the technology is up to it, the user can also say it into a mic, and the FOIA entry will appear.

Refining the pitch

I discovered fairly early that I needed to tie our Govlishstartup to an existing, recognized movement, and that meant reaching out to the “big data” people. Hence our “elevator speech”—Govlish is a data-driven solution to navigating our government—the largest, most complex organization on the planet.”  Big data people are largely mathematicians and ultra-techies, and relating to them wasn’t easy for someone who flunked high school algebra. But they “got it,” as do equity investors. They easily grasp what we’re doing and its significance, something that others had difficulty even getting their heads around. For an entrepreneur who is a combination of linguist, huckster, and wonk, it’s a somewhat uneasy alliance. After introducing myself at one data-science networking event, the event leader asked me, “What’s a wonk?” I explained, “A wonk is someone who can tell you whether ‘anal’ and ‘retentive’ are hyphenated or not.” It got a big laugh.

Explaining a unique startup to equity investors is equally challenging and extends to shining some light on our market potentials, which are not at all obvious. For example, U.S. elected officials, a relatively small segment of our market universe, number approximately 500,000—a figure that astonishes almost everyone. Add to that their staffs, and the number doubles or triples. Most are at the local level, of course, and our databases at this time encompass the federal and state levels. But when you realize that on average 40 percent of a state’s revenue comes from (or through) the federal government, which the state in turn funnels down, these people have a vital, ongoing stake in understanding the taxonomies and folxonomies of the federal government, which sets the standards and regulates how the funds are spent. Studies we have conducted bear out this connection.

All of which is to say that a truly innovative, disruptive startup requires a great deal of face-to-face communication with potential equity funders. The various online services, where startups can post a pitch, are simply not up to the task. Neither are the cattle calls such as “Shark Tank,” which are not only demeaning but also far below the level of reasonable return for the effort expended.

Understandably, equity investors do not encourage unreferred invitations to meet, and getting face time is difficult and time consuming. This being the case, and out of my own experience, it was vital that I make two important points:

  • I am not here selling municipal bonds. If you are looking for iron-clad security—a high level of financial assurances—I would suggest that you are in the wrong business. Most startups—much less an innovative, groundbreaking startup—involve accepting risk. If you are risk averse, you are not a serious equity investor, and you are wasting both our time.
  • Neither am I selling lottery tickets. If you are looking for a glitzy get-rich-quick scheme that brings instant fame and fortune, the odds say you are on a fool’s errand, and I have no desire to go there with you.

As a startup entrepreneur, my job is to build a machine. The equity partner’s job is to provide the oil and gas to make it run. The machine must break new ground and serve an as-yet unmet need. The equity investment must be sufficient to allow the machine to reach its full potential over time.

An initial investment might be small (“Lean,” for an MVP, or Minimum Value Product), but the investor must also realize that such an investment is truly “seed” money, and stopping there results in nothing more than a break-even scenario at best while minimizing losses, far short of our mutual goals. This is not a scenario that either an equity investor or a startup entrepreneur is seeking. Certainly, benchmarks can be mutually agreed to which, when met, trigger decisions to move forward, pivot as appropriate, and commit additional time, effort and funds. All of this implies an investment in time and intellectual and emotional energy as well as money—the stuff of a long-term partnership.

My business development plan did not spring fully formed out of my head. While I have been a successful entrepreneur since 1986, Govlish has potential far beyond that experience. From 2013 to earlier this year, I was a member of 1776, a renowned Washington, DC, incubator, where I learned the ropes for how to seek equity funding. I “graduated” from 1776 when I realized that I have credible answers for every possible question an equity funder could throw at me.

Moving toward launch

Our markets are defined, quantified and qualified. We have conducted needs analyses, and branding is complete (Govlish is a trademarked term), and our web site architecture and wireframes are drawn up. We have tons of proof of concept from the media and relevant users and a successful introductory splash page. Our business models include low-, medium- and high-value products to monetize the traffic drawn to our site. The next step is to go live and demonstrate traction.

Our app, called the “Govlish Cheat Sheet,” is our low value business model, and we’re planning a standard 0.99-cent access fee with some limited features, to be decided.  The web site is our mid-value business model and will include membership subscriptions, certain other features as well as sponsorships. At this point we have subscription prices worked up and tested.  Our high level business model primarily includes data sets.

Google Index tells us there are 14 million searches every month for government terms. We expect to capture the lion’s share of this traffic. Further, if we feed our 100,000 data bits (or terms, as mentioned above) into something like a Google warehouse and work appropriate algorithms, this dwarfs that 14 million figure. Our plans for scaling our operations and content, both vertically and horizontally, present added potential.

Our potential is considerable, and the two angels, VC, and several industry leaders we are talking with are very encouraging. It’s an exciting time.

With the work we have done to date, which includes all the architecture and wireframes, we’re now about 3-4 months from launch. We will start the process immediately upon raising the necessary funds. With the new crowdfunding rules issued by the SEC, that may be sooner than we had hoped.

Legendary nineteenth century city planner Daniel Burnham famously said, “Make no little plans. They have no magic to stir men’s [or women’s] blood.” Big plans, on the other hand, do stir our blood, and when carefully thought out and seriously pursued, generate not only the greatest profits but also the greatest satisfaction—and even fun—not to mention making the world a better place.

— Robert Mander, the Founder of Govlish, is a seasoned entrepreneur with more than 25 years of experience owning and operating a small business. A native Chicagoan, he currently resides in Washington, DC. For more information, visit www.govlish.com or contact Robert at AlphaSoup@govlish.com.

 

Editor’s Note:  Bob Mander, founder of www.Govlish.com,  spent much of his career dealing with mind-bending government acronyms like OSDBU, LORACS and SME.  A technical writer of government documents for 10 years, Mander also had a ‘big idea’ about how to demystify this kind of insider jargon.  Over the years, he’s assembled what he calls a resource library where government workers, contractors NGOs, elected officials, media and befuddled citizens alike can, among other things, quickly unravel the meaning of obscure government acronyms. Bringing that idea to life has been his passion for the last four years.  With his site nearly ready to launch, we asked Mander to write about the challenge of trying to interest investors in his new idea.

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