Tuesday, March 16, 2010

Startup Advice - so you have a great idea?

The following question was recently posted on an entrepreneur forum:

At the moment I have an idea in mind that I believe could be really big. I have discussed it with a few close friends because I wish to take first-mover advantage. The problem is that I lack the programming ability to make it a reality on my own. My programming friends are quite busy with work and they don't believe that they have the level of programming ability I require.

I have developed a workable operational and growth strategy with a revenue stream that will not commence until after 1-2 years. What should I do to seek trustworthy web programming expertise that I require?

Where can I go from here? 

I was extremely impressed with the response from Brad Down, printed below:

The reality is if you have no money, no friends that can help and no business partner, all you have is your idea.

The first thing you need to do is pretend like you already have the product and go out and sell it. Develop a sales presentation some collateral even a basic display website. Then ring up some potential customers say you have a product in development and get some meetings.

Remember it's all in the sizzle not in the sausage. If you can't even get a meeting based on your idea alone then you know you are in serious trouble already. Take my advice, forget development, focus on your first sale. If you get a potential customer then you at least you have something to work towards.
If you can't make a sale then you are wasting your money and human capital with dev.

I spent over $100K of investor money on our first startup before we made our first sales call. Fatal...we could have saved the $100K if we had have done some research and actually asked some people if they wanted what we were selling. No matter how good your idea, commercial realities exist, so many external factors and perceptions can affect your business model.

So much can be done without a cent spent on dev.

Brad's comment is a very concise statement of the SDBS methodology:
  1. Sell 
  2. Design 
  3. Build 
  4. Sell 

As Brad says, if you can't get a single customer to commit to your product before development starts, then you are likely wasting your time. Enough said.


  1. Well. I was following the same thread of discussion on that entrepreneur forum. My last startup (~9 years ago) did almost the same thing -- sold the idea to our prospect before having a demonstrable product 3-4 months down the track. However, we were funded. We already have team of experienced developers and business analysts and established reputation in the industry.

    While it is great to know the market before start designing and building, it is really not for everyone. If I am on the other side of the table, I will be very hesitant to commit to a product that does not even have a workable prototype. It's not the .com days anymore.

    And a workable prototype does not have to cost $100k...

  2. I wonder what this secret entrepreneur forum is? ;)

  3. My employer Vast.com has built an impressive business: a white-label search engine platform powering some of the biggest portals on the Internet (like AOL, Yahoo, amongst others). But it was a hard business to get into. I asked
    my boss how did they do it and he told me a very insightful story worth sharing here.

    Vast's first major partner was AOL. And when they pitched AOL, they didn't even have the technology to do what they were pitching. Instead, what they did was us the Firefox extension Greasemonkey, which modified the AOL
    portals behaviour, and 'hacked' it to look like what the Vast team where pitching as the potential.

    The AOL exec's were sold: they knew it was a hack, but the fact they could see their website (which they knew back to front) being shown live - but with a modification that made them see the potential - was enough for them to sign a major deal, that in turn has bootstrapped the multi-million dollar company that Vast is now.

    Hack an idea, sell the idea to customers or investors - then build the idea properly. That process and rule of the startup world that few acknowledge, is also the reason why good engineers and perfectionists make terrible
    entrepreneurs (and why startup camps are a great way to filter people as founders for your startup).

    So my advice on next steps: raise $10,000 - and spend it on development for a prototype, by hiring some contractor. And don't be afraid to share your idea: don't do it on this forum of course, but attend the offline social meetups that this community has. No one there is going to steal your idea, because they have their own vested interests and are too busy to do so. But
    they will give you direction to know how to progress forward.

    Focus on building the minimum viable product and on creating an engaging user experience (as with any service let along web services, the experience in the product - meaning the visual interaction - is what people see and therefore use to draw judgment on the product). And once you've articulated your vision in a prototype, you can then talk to partners and investors
    about building the real thing. Don't waste your time building a technology that will take two years to monetise, unless you can get people excited with your prototype. And remember, it doesn't have to work - it just needs to
    look like it can.

    Elias Bizannes