A few weeks back I received an email from Morten Resen. If you for some reason don’t know Morten here is a brief intro →. Morten was reaching out to get a meeting with me based on a recommendation from the investor Jesper Buch.
Morten Resen’s idea is to build an app for families with children to use when traveling. The working title is GoLittle, and Morten calls it a TripAdvisor for families with children.
At Shape we do our very best to spend 30 minutes with everyone who wants a meeting. That being said we try to do as best as we can to verify that it will be mutually beneficial to meet – especially if it is an investment talk. Morten’s idea was rough and without a solid business model, so why did we think the project was interesting? There are 4 reasons:
Distributing is becoming the key to success as the App Store becomes more and more crowded – that is if you have the other requirements (solid product, design, reliability etc.). Morten’s model where he builds the marketing first and then the product afterwards is very interesting and something we can learn a lot from.
As father to a boy of two and a half years of age I have experienced the same problem as Morten describes. So the app is, in my opinion, offering a solution to a real problem.
Parents are fantastic customers – especially if you are delivering great experiences for their children.
Morten is just a very nice and polite guy. Easy to work with and good at listening and taking in new knowledge. He makes a great partner to be in business with and to learn from.
Shape is a consultancy company at the core. We make a living by helping large and small companies building and maintaining great software and hardware. We have worked for small companies consisting of one person and companies with hundreds of thousands of employees. Each new customer provides a new challenge.
When our core business allows it we invest technology in new projects. investments typically go to someone with a good idea and a deep industry knowledge, but without the ability to create the product. We are mostly interested in B2B products, and we will go far to get proof of sales (a pilot customer) before developing the first version of the product. We will build a great product for our partner to work with, and our partner is responsible for doing the selling and marketing. Over the past 6 years we have started two such partnerships with two products based on our own ideas. We now focus on starting a new project a year.
In the projects we take between 1/3 and 2/3 of the company’s equity. Often the projects are very new, and that’s also a reason why we want to get involved. It is not because we are greedy, but we want to be in the projects on co-founders basis and will not come with more capital later, so we will have to be able to be diluted and still keep a meaningful share.
Mortens project doesn’t fit our standard model 100 %. First it is B2C but with a B2B business model (at least in the beginning). Second we only make a prototype and not a full product. That is also reflected in the lower equity cut we suggested to Morten.