Imagine yourself in this scenario:
You’re searching for a new home. You know you want to live on the beach and you want your house to be environmentally responsible with a focus on sustainable energy. You’re also concerned about hurricanes and need to be sure the home is built strong and stable.
An architect and builder approaches you with blueprints for a design like you’ve never seen before. It’s a gigantic plexiglass sphere designed to be buried halfway into the sand on a beach. The material making up the outside of the house collects solar energy from every angle and uses the sun’s heat to warm the interior in the winter. Its shape makes it completely resistant to even the strongest hurricane winds, and the interior design presents so many different options, you can essentially do whatever you want with it.
It seems absolutely perfect, so you ask to take a look at the house itself.
That’s when the architect tells you it’s never been built. In fact, it’s just an idea he had and the blueprint is all he’s done with it so far.
How likely are you to buy that house?
You’re the architect, the investor is the home buyer.
In this illustration, an entrepreneur with a great idea for a brand new web-based product or service is like that architect with blueprints in hand. Often, these entrepreneurs will actively seek out angel investors to help them fund development so they can get their idea off the ground.
But what they sometimes fail to consider is that those investors are not banks or loan sharks who are likely to indiscriminately throw money around. They’re more like potential home buyers with a very specific set of criteria they’re looking for in any project they decide to take on. These investors know they’ll be “living in” their investment portfolio for several years at least, and they need to be comfortable with the concept’s potential and practical value.
That’s why 99% of investors are going to want to be able to “see the house” as opposed to just reviewing “the blueprints” before handing over money to an entrepreneur.
The value of the functional website prototype.
A prototype is different from a mockup or wireframe.
In the above illustration, the blueprints could be likened to a mockup: the basic design elements, laid out to provide a visual representation of the site concept, but without any functionality.
The functional prototype, on the other hand, is more like the model home that potential buyer wanted to walk through. It’s a fully realized design created specifically to wow investors, including just enough functionality to tell the full story of the idea, but at a minimal financial and time investment.
While an entrepreneur with a mockup can show it to investors and say, “this is what it’s going to look like,” they can show investors a prototype and say, “go ahead, check out what the users will be able to do.”
The difference isn’t a subtle one. It’s huge.
Is a functional prototype worth the cost?
This is an important question because even the most barebones functional prototype can require between a $5,000 and $10,000 investment up front. And since the prototype is going to be used to hopefully convince investors to support the idea, that initial investment is likely coming from the entrepreneur’s pocket.
So is a prototype worth that kind of cost?
It is, and here are the main reasons why:
- Engaging the senses: simple human nature dictates that the more senses you can engage, the more memorable and impressive the engagement is. Investors who are able to see, hear, and interact with a functional prototype are far more likely to be impressed by the concept than those who can only see a mockup.
- Greater perceived value: even if the mockup is sufficient to impress an investor, a functional prototype is going to tell a deeper and more comprehensive story, increasing the perceived value of the idea – and therefore the size of the eventual investment.
- Sign of commitment: although angel investors realize that risk is a large part of what they’re doing, they also understand that the more committed an entrepreneur is to their idea, the better chance it has of eventual success. The fact that an entrepreneur has already invested significantly in the development of a prototype speaks to their personal and professional commitment to seeing the project through, which in turn eases the mind of the investor.
So, if you have a great idea for a new web product or service and you’re considering seeking outside investment, we strongly recommend investing first in a functional prototype designed specifically to impress potential investors. You’re going to end up with more money to work with in the long run and a better chance of success as a result.