Prove Your Idea First, Then Build

This week�s member blog post is showcasing Sazneo, another great company here at TechHub. Sazneo specialises in facilitating group communication by enabling people to hold multiple real-time group discussions with their team members. Brett Davis, CEO of Sazneo, shares some more about his company, their latest projects and advice on starting a business:

Sazneo is a real-time group messaging service for business that enables teams to communicate more effectively both internally and with teams at other companies. You know you have the problem that Sazneo solves if most of your e-mail is of the reply/reply-to-all variety where people are trying to have team based conversations. You will probably spend several hours a day managing your inbox.

Sazneo went live in September 2010 and we have two routes to market: a �freemium� model where people trial the service for free and begin paying when they pass through the limitations of the free pricing plan and an embedded model for companies that wish to offer a group messaging capability within their own products

We�ve been pretty busy, having recently released some key new features, including; the ability to structure discussions around �Topics�, real-time questions and answers and support for Blackberry smart phones. We�ve also just closed a round of Angel funding of just over $200,000. However, let�s not beat about the bush, starting a business is hard and will turn your hair grey. If you have grey hair already, then you will probably get wrinkles. There are a few challenges we have faced that are worth a mention.

Fundraising is a huge task! You can literally spend 85% of your time over 3-4 months on this one task, which has a very real impact on your ability to run the business during this period. Generating awareness of your new company is just as hard, especially in the UK. Getting covered in the main tech blogs is easy when you first launch but continuing to generate blog-worthy content is difficult. Also, building a following on social media takes time and the jury is still out for me as to how useful it is in the B2B space.

The immediate benefits I noticed are:

  • Everyone is very supportive; there is a genuine passion to see people make a success of their business

  • There is a great network of contacts you can have access to

  • Sources of outside funding are connected to the Tech community, this can help with fund raising conversations later

  • I don�t need to take my suits to the dry cleaners as much, but I do need to buy another pair of jeans...

The biggest market dynamic that affects us is the move by companies to explore other ways to communicate outside of e-mail. This momentum has definitely been caused by the take up of things like Facebook and Twitter, which is great for us. The increased usage of Freemium as a pricing strategy is also interesting, especially as it is still a young business model. However, when people decide to pay using this approach they expect the cost to be only a few ��s per month, meaning you have to keep a close eye on costs.

Lastly, I have seen a significant shift this year as to the acceptance of cloud based services. If we had started Sazneo in 2008 I think we would have struggled to gain traction with larger companies.

Sazneo is gaining ground on both the stand-alone and embedded options, so expect to see some great success stories around these projects. Also, look out for an increased API capability.

Here are my top tips for anyone considering starting their own tech business:

  • Prove your idea before you start coding to avoid spending time and money developing something people don�t need
  • Find a co-founder you can trust � starting a business on your own is hard and it really helps if you can test ideas with someone else
  • If you are privately funding your business, make peace with the amount you are planning on spending and then don�t think about it anymore
  • Don�t build any features that customers have not asked for. What you think is cool doesn�t matter unless it gives you a competitive advantage
  • Be prepared for any initial press coverage you gain from Tech Blogs to fade pretty quickly
  • Plug yourself into the Business Angel�s scene as soon as you have something to show people, even if only a prototype
  • Don�t delay exploring whether your business idea has legs. I can�t imagine anything worse than saying �What if?� on your retirement day...