So you have a great idea for a startup but no money and you can’t do the work…
Honestly, if you can’t either write the first check or do the work in the beginning, it’s probably not a good idea to flirt around with starting a company. When I started my first company, Spunlogic, I could do the work. We were building websites and I could program them (a fact that my current employees think is hilarious, that I could actually write code once upon a time.)
When I started Dragon Army, I wrote the first check. I can’t “do” anything at Dragon Army when it comes to building mobile experiences, but I was able to contribute some of the first capital to get the company off the ground.
I guess the point is, if you just have an idea, while it might be the greatest idea ever (I’m sure it is), if you don’t either have the ability to fund it or the ability to execute on it, then it’s probably not the greatest idea for you.
Hey Jeff, I have a slightly more optimistic view on this topic. I think there is plenty of work people can do around an idea that doesn’t involve any special skills… what comes to mind is working to interview potential customers and validate the idea or perhaps build an audience around that space (once you have an audience you have something people want!), or even approach larger companies that may want what you will eventually build and offer to work with some members of their team to build a working prototype (I have no idea if this will work!)…. If the person has the ability to sell a solution and likes risk, they might be able to sell the concept to a customer before having any product at all, then outsource the building of it, and deliver that solution a few months later (kickstarter model).
My thought is that there is always some hard work that can be done to move the needle forward on the concept so that eventually you can either cut the check or attract the talent that can help you get it done.
I also think the tools are getting so great that some stuff that seemed like custom solutions even 3 years ago can now be accomplished with wordpress and some premium plugins, so even an average person may be able to build something that people will pay for.
But… you’re also right. If they are totally out of their element, perhaps the idea isn’t right for that individual.
Hey KD! Ok, so yes, you can definitely do things to start validating the idea, but you’re still going to need to fund it (which you can’t pay for, assuming you don’t have the funds) and you’re going to need to build it (which you can’t build, assuming you don’t have the skills). So let’s play it out.
You build out a plan by talking to customers and it’s a great plan, and then you try to get funding. Here’s the thing, funding doesn’t happen for non-builders unless they have a track record of building successful companies. So let’s assume you’ve built a successful company (and somehow don’t have funds from that?), so then you get someone to fund you, they have to pay for your salary plus the people who are going to build it, so you’re already asking for more money than you “need” and spending it faster than you need, which puts more pressure on the company. You’re basically starting off with an already risky initiative (less than 5% of new companies make it) and you’re making the odds even worse. That’s a tough call.
So I’m not saying it’s impossible, of course it’s possible. And I’m one of the most optimistic people you’ll meet, but when I give advice on this blog I do have to temper optimism (“You can do it, go out and change the world!”) with the reality that someone might do that, and if the odds are incredibly against them and they put their family/life in risk. And I can’t have that burden on me unless I really believe it’s probable.
Didn’t mean to come across as contrarian. I’m grateful for the advice you give freely here and in other places! You’re obviously much more knowledgeable about startups and investing and funding.
I guess my only real point is that I try to believe with enough elbow grease and hustle somebody might be able to get something rolling that attracts either customers, talent, or funding.
But since we are talking about it now, what about angel funding? Is that something you’ve done or would do based on an idea, pitch, or a MVP?
Not at all! I love to have these conversations/debates, it’s all good and I appreciate your voice. I’m curious what you’re thinking about because YOU are someone that does have talent, so you’d check one of those boxes ;)
Angel funding is a possibility, but again, unless you’ve had great success or you’re such an expert in the field, I don’t think “professional” Angel funding is possible. Now, you can definitely find people who believe in you or the idea that are wealthy individuals willing to place a bet. I’ve raised that kind of Angel funding, and I’ve pitched the “professional” kind and been unsuccessful.
Hope that helps. Always bring the questions, I love to discuss these topics!