A wireframe alone is rarely going to be enough to convince an investor to put their hand in their pocket, unless you’re Elon Musk. But that doesn’t mean it isn’t an essential part of the investment puzzle…
So you’ve had an idea for a game-changing digital product. You’ve blitzed up a wireframe and you probably can’t wait to get out there and sell your idea to investors.
Before you do get out there and bid for investment with a wireframe, stop and take stock. A wireframe isn’t always enough to excite or intrigue investors. Winning investment is about winning trust. A wireframe can be an integral part of that process, but only in very special cases can it seal the deal.
Are you in one of those special cases where a wireframe is enough for an investor to put money on?
What start-up investors really want
Put yourself in the investor’s shoes. How many “game-changing” digital products have they seen this week, or even just today? A lot, probably.
This means that no matter how good your product idea is, it’s not enough on its own. Investors are not simply looking at the product’s potential. They are looking for the whole package.
If you’re seeking seed funding, you need to build that “whole package” from zero. Early stage investors will expect you to have in-depth knowledge of:
- Your market or sector, including competitors and growth potential
- The problem your product solves, including the emotional and financial benefits a user can expect
- Why people will buy your product and not that of your competitors
And that’s just the start! As long-time angel investor Ari Korhonen points out, investors base their decisions on everything from your business plan and scalability, to the strength of your founding team.
What they’re really investing in
All that said, the hard truth is that it’s not your snazzy product prototype, or your 50 page business plan that gets investors on board.
Investors are investing in you. In your ability to execute. In how much they believe in you as a leader.
So take a look at yourself objectively. Do you have a track record in the sector into which you’re launching the product? If you’re launching a design tool like Justinmind, for example, you (or at very least your foundational team) should have hands-on experience in both the design industry and SaaS. Without that investors are going to be hard to convince.
Next, do you have a track record of success? If you’ve already launched and exited several products successfully investors are going to look more kindly on your venture. That’s just savvy investing.
Also, take into account your geography. Are you targeting countries you’re familiar with or are you launching in a new cultural arena? In the context of a digital product this can seem old-fashioned and irrelevant but it isn’t. Markets and consumer habits differ widely according to geography; are you ready for that?
Read the 50 questions that angel investors are likely to ask you, here on Forbes.
When is a wireframe enough?
So, if you’ve got skin in the sector you’re launching into, in-depth market knowledge and a stand-out record of success then you might just get investment off a simple wireframe.
Why? Because if you’re still at the wireframe stage the investor has very little information to go off. There are no revenues to look at, no customers to analyse. The only thing they’ve got is a wireframe, and you. That’s pretty high risk for any investor.
That’s why you should only go into an investor meeting with nothing more than a wireframe if you’re Elon Musk. We’re assuming you’re not Elon Musk (unless Elon reads the Justinmind blog, in which case, Hi Elon!), so don’t rely on a wireframe to win you first-stage investment.
But that’s not to say the humble wireframe doesn’t have a role to play in getting investment! There are some savvy ways you can use quick and dirty wireframes to win a cash injection.
A couple of things you can do with wireframes to win investors
Validate demand for your product
You have to establish three things before approaching any investor.
- Your product idea solves a problem.
- Enough people experience that problem to make it worth your while investing your life in making a solution.
- People are willing to pay for a solution
A wireframe is an essential tool to help you do this. So what’s the process to validate demand with a wireframe before taking it to investors?
Step 1: Make your wireframe.
Obvious, right? But it’s worth focusing on this stage for a moment to go over the basics.
Concentrate on keeping the wireframe simple. Make sure it doesn’t resemble any kind of finished product as that will close down creativity and potential for improvement.
If you’re making the wireframe with Justinmind we have a couple of free to download UI libraries that give you that real wireframe feel: Sketching and Web Wireframing. These have drag and drop components that give a rough visual aesthetic
At this stage you should only focus on:
- Page layouts
- Content hierarchy
- User flows
Step 2: Test the wireframe on users
Say whaaaaat? You want me to test this ugly old wireframe on real people? Hella yes.
Even at this early stage you can validate demand with potential users. The key is to create a test with a very strong guiding structure. Do not just plonk your wireframe in front of someone and ask them what they think.
And whatever you do, do not fall into the rooky trap of asking testees “would you buy this product?”, warns Validately’s Steven Cohn in a 2016 interview with Justinmind.
“In everyday, non-testing life, saying “yes” is a trade-off decision,” explains Steven. “To say “yes” we have to first determine, “Is it worth really worth it to me?” As this is the same question that your users will ask themselves when your product (or feature) is released, you need to force that decision during testing too. “
To force this kind of trade off in the test you have three options: time, reputation and money.
- Time: ask the testee to give you more of their precious time. If they’re really into the product, they’ll say yes.
- Reputation: Are they willing to share your product idea with their networks? If not, maybe they’re not that into it after all.
- Money: Will the testee pay a nominal amount to reserve pre-launch access to the product? Money talks, baby.
Even this won’t guarantee product success. But if you go to investors with the wireframe and the results of your demand validation testing, they’ll have a better idea of market potential and scalability.
You can find more info on validating demand here.
Get investment to fund product updates
This is a no-brainer. In this situation you already have real data on how your product is faring in the marketplace. You also have user feedback, both quantitative and qualitative. So you should have a pretty good idea on where the product needs to go now and how much money you need to make that happen.
You now need to wireframe product improvements based on that information and justify why these are the right improvements to make. You also need to explain why this is the right time to make them, and how investment will make the magic happen.
A wireframe will bring that explanation to life. Build a wireframe of the proposed changes to the product and take it to the investor meeting with you. Let the investor play around with the changes on their own device. They’ll be able to experience the improvements you’re suggesting while hearing about their justification based on existing data.
Investors like that kind of information.
Is a wireframe enough for an investor to put money on? – Takeaway
A wireframe is only going to clinch the deal with investors in rare cases. If you have a hugely successful track record and can present yourself as a safe investment, then you can go into an investor meeting with a wireframe. If you don’t have that weight as an entrepreneur, don’t do it.
That said, a wireframe is an essential stepping stone in the long journey to investment and successful product launch. Use a wireframe as a piece in a bigger puzzle and you may well find the angels on your side.