views:

511

answers:

14

Hello everyone.

I'm just finishing up over 6 months of thought and labor on a project. The impact of my web app will send reverberations through-out the internet, for sure in terms of the technological idea behind it (it will definitely make TechCrunch, ReadWriteWeb, etc), and, hopefully, reverberations with day-to-day users of the internet.

For the sake of this post, assume that this idea really is a very, very good idea. Pretend I explained the idea to you, and you loved it, and you saw it's immediate appeal as well as the framework it creates for future improvement, profit, and research.

Now, my question to you is: where do I go from here?

  • Do I put it online for all to consume? Hope that I can withstand the massive amount of traffic it obtains from several blogs? Force myself to keep the system afloat (optimizing, scaling, fixing bugs, securing every last bit, etc) long enough so that my websites reaches the breaking point (critical mass) before another competitor moves in?

  • Do I make a privately accessible prototype, and try, somehow, to show it to VC's to get money so that I can launch the product confidently and with the assurance of an entire team of people working on it? There are so many regions of development to explore and a lot of the technology can be vastly improved if I had some really brilliant people working on it. It has several extremely appealing and unique ways to generate revenue right from launch.

  • Do I make a privately accessible prototype and try to sell it? Yeah, the idea is that good.. I just don't know how to get in touch with the people who would buy it.

  • Patent the core technologies, then ask this question again in a few months? I'm not sure this would help... would a patent on MySpace prevent other social network clones from popping up? No. Nor would a patent on what I've made.

This is a very important decision for me, as I'm nearing the end of the beginning. The 6 month, 15 hour days, going insane taking into account dozens of existing ideas and having them mold together when least expected into something so pure, simple, and beautiful that I know the world will appreciate and use it. This is the project I was born to make.

I welcome any questions you need answered in order to give sound advice.

Thanks

A: 

The answers to all of those depend on the details and what you'd like to achieve. For instance, some projects require VC, whereas some others it may be a nice-to-have or it may be possible to do your project as a "lifestyle" business.

The way I see it, though, you probably want to release something. If nothing else to be sure that what you think is so great is actually that great. It can be very easy to drink your own kool aid ;)

rz
A: 

Have a look at a similar question I asked a while back:

http://stackoverflow.com/questions/142975/what-to-do-with-your-old-applications

I should stress that this isn't a dupe of my question since I was primarily concerned with apps I wasn't really interested in anymore. This one seems to be more about how to put more active apps out there.

Still, the github and sourceforge answers probably still relate to this question - let some other infrastructure provider worry about the bandwidth, you just worry about your code.

paxdiablo
This is definitely a more active app
Sam
+5  A: 

My advice to you is put it out there in the open. You are probably sure you have a finished product, but after a few hundred users you will know that you still have plenty to go. For this reason, most new ideas/startups go through a short period of closed beta before releasing a public version that has been tested by the real-world.

Going to a VC with just a prototype and no users is also inefficient. You might get lucky and get funded, but in general real user feedback makes much more impression than an idea/prototype, and gives a real base to future predictions. If they are paying users, or generate revenue in any way, then you will clearly be in a much better position to raise funds.

What you need now is traction - get the word out, start testing with users, improve your product and continue the marketing efforts. When it's ready and if it's good enough, investors and other movers and shakers will be at your doorstep trying to get a piece of the action.

Eran Galperin
Good advice. Assuming I go for the "closed beta" approach with a few hundred users, where do I get these users from? The main issue I have is trust.. I want to ensure I get critical mass before someone with money and resources swoops in and steals my idea.
Sam
You need generate a little bit of interest without saying exactly what you are doing. Create a landing page that allows people to request an invitation to participate, and generate a little traffic towards it. Those registration you don't use will also be useful for the the public release.
Eran Galperin
Check out my current startup homepage, it's exactly what I'm talking about (we're currently in closed beta ;) ) - http://www.octabox.com
Eran Galperin
Also (sorry about the multiple comments), get people you trust to try it out, and slowly expand the circle of trust to people you know less and less (or recommended by others).
Eran Galperin
Eran - you're doing this with no VC funding?
Sam
Correct. We used to think we want VC funding, however we made it this far without it, and we're close to a public release (2 months). After we start generating revenue, we are considering going straight to a series A funding round and skipping a seed round. Or we just might continue self-funded ;)
Eran Galperin
Eran, Octabox looks cool. Take a look at http://thegrowinglife.com/2008/05/the-alternative-productivity-manifesto/ ... maybe you'll find some inspiration :)
Sam
Thanks for the link :)
Eran Galperin
I can generate thousands more, including all of your competitors, if you'd like ;)
Sam
We've been doing this for a while, so we're pretty well acquainted with them. We'd like to think though (like everybody) that we offer something different from the rest. Register to the private beta and you'll see ;)
Eran Galperin
+2  A: 

Hi, first of all, great ideas are born every day, few of them even when implemented well above the "prototype level" still survive. Google is the exception to prove the rule here. Leonardo's customer to the Mona Lisa painting refused to pay since it didn't look like "his daughter"...

Assuming your idea still will "make it".

  • You can forget about VC money in these days (due to the financial meltdown)
  • You can also probably also forget about being acquired (due to the financial meltdown)
  • You can also mostly forget about patenting it. SW patents are only(/mostly only) legal in the US and even there they have been disputed quite heavily lately. Beside if you patent it none of the great developers here on Earth would touch you even with a remote control...!!

So what's left is basically bootstrapping until you get enough revenue on your idea to break even and continue working on it, hosting it yourself and cross your fingers which leaves you with (statistically) 5% chance of coming anywhere near a "success"...

I guess lesson learned here is that the only way to "get rich" is to "work hard"... ;)

Thomas Hansen
+1 you're absolutely right about the VCs there is simply no money there unless you have an already established business and are in a potentially highly profitable industry. However acquisition is still possible depending on the type of product you're making.
Greg Beech
-1. There's heaps of VC money, you just need to get in front of the right people. If you're idea is really good and others can see value in it, people will back it. It's the old "build it and they will come" scenerio
ninesided
@ninesided - LOL you obviously haven't been out raising capital lately!
Greg Beech
+5  A: 

While I doubt that your site is for online dating, I love the story of the website PlentyOfFish.com. That guy had a lot of experience in websites. He wanted to learn .Net, but was too cheap to buy a book. So he thought up this concept of a website to do as a learning project. He created it and just put it out there. Because it had such a compelling concept (free, better features and functionality), it spread like wildfire. Since the guy was skilled at website configuration and servers and databases, he was able to support it entirely by himself, with help from his girlfriend, for a long time. It generated a huge revenue stream from advertising. By the time he was ready to hire an employee, he had been offered $1 billion for it. So far (AFAIK) he has refused to sell it.

Moral of the story: just put it out there. If it's good, it will take off. A very small team of smart, experienced people (one guy) can manage the load from rapid growth. You CAN do it. Great ideas are unstoppable.

P.s. If you're a geek looking for a mate, this is a great place to look. P.P.S. I have no connection with this website. Just a fan.

DOK
Here's the page where he talks about developing the site http://www.plentyoffish.com/about_team.aspx
DOK
Have you heard the story about connectU.com?
Sam
Sorry for the last comment... what I was getting at was that some sites have their idea ripped off, and you never hear of them again. ConnectU and Facebook is one example, though there is more backstory there.Anyway, interesting stuff with POF... have a source on the $1b offer?
Sam
Here's one source for that $1B figure, Sam: http://www.readwriteweb.com/archives/plentyoffish_one_billion.php
DOK
@DOK Wow... holy shit.
Sam
Incredible for a website that doesn't even properly scale images, even though said images are extraordinarily important.
Sam
+3  A: 

You should check out Paul Graham's articles on entrepreneurship, specifically the ones, titled: "How not to die", "How to Start a Startup", and "How to Present to Investors". He's a VC who made it big with Viaweb (now Yahoo Stores), and now runs Y Combinator, a VC firm that is doing interesting things with much smaller investments (than are typical for VCs).

In addition, check out the Hacker News site, a Reddit-like news aggregator and discussion board for entrepreneurs. It's got great discussions on exactly what you're trying to do.

flamingLogos
Y Combinator is most definitely not a VC. They fund like $10-50K. VC's start, reluctantly, at $500K.
Patrick Huizinga
YComb is more of an Angel Investment firm. They give kids a place to stay and put food on their plates for a small amount of time it takes them to hack something, then help them present to VCs.I was my own YCombinator, but I don't have connections to present to VCs. Hence my predicament.
Sam
@Sam: I wouldn't rule YComb out without speaking to them first. They do all kinds of deals. If nothing else, hang out on their Hacker News site and see if other people are in similar situations.
flamingLogos
A: 

Venture capitalists are not fairy godmothers. They take your financial risk in the expectation of sodding off with as much of the proceeds as they possibly can. Since they do this for a living and you (and most of their victims) are doing it for the first time, their chances of raping you are pretty good.

If you must deal with these predators, read the fine print several times and talk to others who have been rolled to find out how it was done. Like record companies, VCs exploit the fact that most of their prospective victims are first-timers who don't realise that the terms are negotiable.

You can return the favour, and exploit this expectation. With careful thought it is often possible to change one or two words in the contract so that the change in meaning shifts radically without the change being obvious. Place an obvious change nearby to divert their attention, and and agree to yield on it. Ensure that you make the revision so you can preserve your other edit.

If you do this be prepared to go to court later, because when they find out they've been played at their own game they will squeal like a stuck pig, and they'll try the time-honoured strategy of we-can-afford-lawyers-longer-than-you.

Peter Wone
A: 

Try to get in contact with Y Combinator or something similar. They are the kind of people that will fund your first $20K or so of money and help you through the first stage of being a startup.

By the way Paul Graham, one of the founders of Y Combinator, thinks VC's will go the way of the dodo (pretty much).

Patrick Huizinga
A: 

Take it to Le Web! :)

http://www.techcrunch.com/2008/11/10/startups-selected-for-le-web-in-paris/

Din
Too late for that... know of any more of these conferences where it's not too late to apply?
Sam
It will be bext year too. Btw. check this also: http://www.openzine.com/aspx/Zine.aspx?IssueID=752
Din
+10  A: 

Reality... Dude you're probably in for disappointment.

  • The idea probably isn't as innovative or great as you think. I'm not saying this to be mean, I'm saying it so that you can get your expectations straight.
  • Development and implementation are usually the last things done. You should already know your target market and potential sales before doing anything.
  • You should have reached out more and been more social. Then you'd probably have connections/counterparts who would team up with you and help flush out your ideas.
  • It sounds like you need at least 2 other people/skillsets. You need a savvy business intellect and you need a charismatic, knowledgeable, well-connected sales person. It's going to be hard to find people you can trust with your project at such a late stage.
  • Unless you get very lucky and find benevolent partners, you are hosed.
  • Don't cheat yourself - get attorneys to look over document and agreements. Make sure you have an NDA before showing stuff to people.
  • Sorry for being grim... Good Luck!
mson
+1  A: 

do you have a business plan? have you done the requisite market research? do you know how much it will cost to launch and how the site/technology will make money?

if you do, then you should be able to answer your own questions - whether patents are necessary, who, if anyone, might buy or license the technology, what VC firms or angel groups might be interested, etc.

do you have a business mentor, financial advisor, legal advisor? These are the best sources of realistic advice, especially if one or more of them has 'been there, done that'.

no one can tell you the best course of action, you have to determine that yourself, based on your level of commitment, available resources, and tolerance for risk.

good luck!

Steven A. Lowe
A: 

If you can turn a profit with your idea, sell it by yourself. Enjoy the little bit of extra cash that you'll get, and in the meantime, use it to help fund additional deployments of your work (AdWords, etc)

Try to:

  • Track downloads or users - this will be invaluable information when seeking additional funding, buy-outs, etc.
  • Take advantage of Amazon Web Services or Google App Engine to handle massive amounts of traffic, storage, etc. You only pay for what you use with these services, and if you're turning a profit, this should work for you.

Also, check out Joel Spolsky's "Business of Software" discussion site - lots of bright people there! http://discuss.joelonsoftware.com/?biz

David
Nice link... will lurk a bit then maybe start talking.
Sam
A: 

Lots of interesting answers, ranging from doom & gloom to technical blah blah (and I'm a coder!) Please answer one question before doing anything else.

What else do you need to make your excellent prototype into a business that makes money?

This is the most important question, and everything else will flow from this. Do you patent, do you need VC, who is your market, how will you get the word out, is Paul Graham rolling in the dough, etc... these are all things to answer once you know how you can actually make money.

Rather than spend all your efforts on a one-in-a-hundred-billion chance to win the VC / IPO lottery, why not try the probalisticaly more certain game of making money using your software?

So tell us, what else do you need to make a business that makes money?

PS: I did this successfully before, and boy was it a lot of work! You're just getting started, so break a leg!

crunchyt
A: 

Make sure you do some user testing first, but I'd say put it on the internet.

(Unlike the guy with 8 votes, I'm not going to say your idea is crappy. Very presumptive! But if it's good -- as you say, the next step is obvious: release it to the world. Make sure you do some user testing though; to me, it sounds like that's what you are missing.)

jerzy