While developing a product or service that appeals to the masses sounds like an opportunity for increased revenue. It can actually be the opposite.
Sales for Startups’ client Workhorse successfully specialises in order and inventory management for SMEs, but this strong proposition wasn’t the initial focus. Here we reveal the journey to realising the potential of the niche and how Workhorse Founder Alastair Badman is confidently working towards Series A funding.
The funding journey
The Workhorse funding journey officially started with the creation of an MVP (minimum viable product) in 2016, and the onboarding of Beta Clients towards the end of 2017. At this point Workhorse was experimenting with products in multiple areas: agriculture, manufacturing, furniture and food and drink. It became evident that Workhorse was competing in a saturated market, up against well established businesses offering similar products with an enterprise price tag.
In response to client and market feedback, it was clear Workshorse was not standing out from the crowd enough. In 2019, Workhorse doubled down on its niche proposition: order and inventory management for SMEs, and received £400,000 in crowdfunding via Seedrs. Investments were maximised over the next 18 months to conduct product development and offer more enhanced integrations.
Fast forward to early 2020 and Workhorse started to get some exciting traction, then the pandemic hit and the order and inventory management industry was hammered. In the unknown, people preserved their cash flow and pulled their investments.
Workhorse survived the pandemic by using the time to take stock and drive internal momentum: hiring new employees in sales, marketing and tech development and by 2021 was in a strong position to grow the business.
Partnering with Sales for Startups at this critical juncture enabled Workshorse to evaluate existing sales operations and rebuild them to scale. Workhorse is now empowered with a go-to-market strategy that means customers receive value faster.
“Finding a partner that understands the opportunity Workhorse offers was vital for our Executive team, but having a partner that backs how we are achieving this and why we are different to others on the market is arguably more important.” Alastair Badman
In September 2021, Workhorse closed its Seed funding round with an impressive £1 million+ investment through The Wealth Club. The due diligence conducted by the investors was thorough and more intense than previous funding rounds.
“We presented business models, in depth forecasts and evidence of customer traction. Despite the process being more challenging, it reaffirmed our confidence in the product.” Alastair Badman
“I think what was really exciting about when we started working with Workhorse was revealing to the team that they had their own unique competitive advantage but weren’t necessarily expressing it and showcasing it in their various sales and marketing materials and conversations. Now we feel confident that by embracing a niche, getting behind a clear USP and a concentrated focus on gaining traction towards Series A, it feels like we’ve got serious momentum at Workhorse.” James Ker-Reid, CEO & Founder, Sales for Startups.
A niche market is the key to the mass growth
Since most investors get their money back from the sale of a company to another business, investors think a lot about how much a company’s valuation can grow over time. The bigger the better.
Some startups misinterpret this and think that bigger means appealing to more customers across multiple large industries. But the benefits of niching and focus far outweigh the challenge of grappling with what’s often a more competitive field of players chasing a bigger opportunity.
Looking ahead to 2022 and beyond, working with Sales for Startups, Workhorse has a target to be a £1million revenue generating business within 18 months and work towards a Series A funding round.
“We know that SMEs need established security with a tailored extendable configured technology without the enterprise cost. We are focusing on onboarding new customers, continuing to support our existing customer base and develop our technology further to serve our niche market.” Alastair Badman
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