A story of an Arab Entrepreneur,who took it from idea to exitand went through all stages ofinvestment.Learn about the startup cycle,to know where you standand what to do next.
Once upon a time, a smart young dreamer had an idea.
He wanted to build the next big ship that will change the world, he was sure that if he builds it the way he imagines, all the people in his town will use it for their travelingWebpreneur perspective: you have an idea of the next bigwebsite or mobile application that really adds value to people.
He was good in design, so he knew exactly how it should look like, but he couldn’t build it, and he knew nothing about how to promote it.Webpreneur perspective: your good in one function (Design,Development or Marketing) but you can’t seem to make it all byyourself.
He realized that he needs help, so he went out there looking for other people to do it together. He formed a team of himself and two others: a geeky developer and a big mouth Marketer.Webpreneur perspective: you realize that you need co-founders, to fulfill therest of the functions your startup needs to become real.
Then the team started to look for just enough money to buy the tools needed to build a small boat as a start.Webpreneur perspective: after finding your co-founders, you still need resources to getstarted, develop a beta version and start attracting early adopters during the first 3months. You can always approach Angel investors or seed stage VC’s for your very firstinvestment round($10k to $20k).
The investors saw potential in the entrepreneur and his team so they decided to give them the money needed to build that small boat.Webpreneur perspective: Investment is always a need not a desire, don’t expectyou’re going to be rich yet.Investors invest in you and your ability to execute your plan not only your idea.
After a few weeks they assembled this basic boat to prove their concept. After they provedthat they can do it, and attracted a few travellers who accepted to travel with them, they allgot on board and sealed for the first time.Webpreneur perspective: you started building your beta version to test out your assumptions in themarket “prove your concept”, you see how the market reacts, and act accordingly.In this phase you are experimenting your product and you should be all ears ”listening to your customerstaking feedback”.
After a couple of successful trips, it was time to take this ship further into the sea. Thats when they found out that the ship needed additional staff and space to accommodate the extra travelers its attracting.Webpreneur perspective: Your startup is going well, customers love you butyou know that if you add a few more features and with a little more help theywill go crazy about it and you will serve more users.
They also believed that all this should be done on the way, because if they stop or go back, people may abandon their ship, and they will no longer be able to attract new travellers againWebpreneur perspective: You simply can’t stop and enhance, you know yourcustomer will go to competitors’ offerings, rather you should develop andenhance while staying online
So at that point, they wanted more money to cover one-month expenses that include: hiring more people to better serve their travellers and to renovate and enlarge the ship to have more components.Webpreneur perspective: well, to add the extra features that will attract more users, that willrequire a bigger team, a bigger marketing budget, a place for you and your team to work at andall that requires extra funding, that’s when you know you need an early stage funding.
They also needed this new fund to hire people and test what the best way to sell tickets is. They also realized that they needed to cover their expenses till they can make money.Webpreneur perspective: you approach early stage investors and present to them whatyou have in mind and show them how you have proved your concept and the next step is toserve more people and find a business model.
Fortunately, they’ve got a good amount of money. With the money, they increased the number of team members and added more components. Next, they started to look in how to sell tickets.Webpreneur perspective: you have received $100K but again the investment isa need to cover your startups expenses, and the only money you have foryourself is your salary.
They tried many ways to sell tickets, they tried monthly paid subscriptions, they hired resellers and gave them commissions, they tried a pay as you go approach every 10 KM for a certain amount and they even tried to sell free tickets but the traveler will be charged for any additional services.Webpreneur perspective: You will try many business models, and find whichbest fits your startup, in terms of what suits your customers and you.
Their ship became so successful that they’ve sold out too many times, and people kept asking when they would have more.Webpreneur perspective: You’re over loaded, your servers arenot holding this much of traffic.
They knew it was time to take it to the next level and build more ships to serve more destinations.Webpreneur perspective: you and your partners decide to take thisto the next level, scale the business and to the growth stage.
So they went back to their investors and told them all about it, and how this will be a bigger success, they also provided plans and facts on how this would be the next big thing.Webpreneur perspective: you approach growth stage investorsand present to them what you have in mind and show them howyour startup is scaling.
Well, the investors trusted them again, and gave them the money that was needed to build and scale their first success.Webpreneur perspective: you have received a $2m investment but againinvestment is a need, and …. Well, you know .. You are still not rich.
Indeed it was a success, within 2 years they had much more travelers than they would have ever imagined.Webpreneur perspective: in 2 years time, you have much moreusers than you have ever imagined.
After a while they decided to raise more funds to buy a few small ships to further expand their fleet, few years later, a bigger fleet noticed them and offered $100m to buy the whole fleet from them.Webpreneur perspective: The big people in the market noticed you and noticedthe success that you’ve accomplished, So they offer you a big fat check toacquire your business.
They sold their fleet, made a good exit, their investors got a great return on investment, and everybody lived happily ever after.Webpreneur perspective: You receive the exit money but again the money isa need....... naaa I’m kidding you and your partners are now rich!
After a big vacation they got back to their round table and started to think of a steam train startup….Webpreneur perspective: Once you get into entrepreneurship it’s hard tostop. So you become a serial entrepreneur, and start a new venture!