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Assume that a client comes to you with a proposal for an innovative idea that encompasses a multitude of aspects of development. It’s a great idea. You can see how the final product could play out and most likely make a bunch of money. My question is how do you pull something like this together? What about money? Do you give little pieces of it away to the various players or do you pay as you go?
This has recently come my way and I’m very excited about the possibilities. What I need to know is do we set up a mock of the site and look for investors? In today’s economy I’m not thinking that’s realistic. Do we create a shell of the idea and promote it and hope it will build and we can add to it as more money comes in. Do we go for broke and put a whole lot of eggs in one basket and hope that what we think is a great idea will actually pan out?
It’s difficult to even begin on the business plan because there are so many things to consider. How do you go about converting what might be a terrific idea into a finished, functioning product without unreasonable risk? Anyone out there have experience with this sort of thing and can help me brainstorm my next steps?
Can you provide a bit more background info? I'm not looking for any info on the specific idea, just more insight into the type relationship you would be forming with the client.
Has the client approached with a partnership offer? (i.e. equity in the entire company) or simply a revenue sharing plan?
Are there any other similar ideas on the web?
If there is, does it appear any of them are making any money?
If there's not, how come? (It's pretty rare in this day and age that any idea is completely new and unique)
How modular is the project?
I've always found when I'm approached with these types of projects, the client has a very large scale, all-encomassing site in mind. I always tell them that no big site starts out big, so I try and break the project up into modules to determine at what point it might realisticly generate income, and how far down the road that might be.
It's a 50-50 deal. He's the money and ideas (to begin with) and I'm the see if it will work and make it happen, position it and all that sort of stuff. We've been working on projects together and it's great teamwork. This is a big idea though and could cost lots of money to pull together not to mention an enormous amount of time.
No one is doing it. We’ve talked with both sides of the industry that will utilize it (we’re the middleman or facilitator) and they like it. There are other forms of the idea that are sort of used in different markets and those look to be profitable. This is an entirely different market though, that hasn’t been accessed as of yet.
We’d need everything from a dedicated host, designer, media, editing, database, and all sorts of other bells and whistles just to get it ready to be utilized.
>How modular is the project?>
Very good question. Initially it’s an enormous for the first leg. From there it has the potential for expediential growth.
Equity? Who has ownership?
Is it a physical product or just a web service? (This sounds like a B2B vortal.) If it involves intellectual property and it's a web project, how will you maintain control of the market if it does show signs of success?
How do you go about converting what might be a terrific idea into a finished, functioning product without unreasonable risk?
Build a mock-up in html with a hard-coded database back end or even with hard-coded html instead of a db. This will allow you to postpone all the db work, and it will let you and your investors see early on what things will look like. At the same time, do some research so you'll know the potential size of your db, so you can say, "yes we'll be able to handle x number of records."
Be prepared to throw your mock up away. Its purpose is to help you brainstorm and to show your idea to investors. You'll also show it to developers if you need to bring in development resources, but it will only act as a specification, not the first draft of the final product.
Based on the mockup, generate a schedule and timeline. If your mockup is 20 hard-coded html pages, then estimate how long it will take to develop the sql and the code that will use jsp or php or whatever to dynamically generate these pages. Be realistic but also add some fudge time. The schedule is for your investors, so you can say "in 3 months we'll be able to knock your socks off with this...(but we need 3 months worth of cash)"
Show your mockup to potential users and get their feedback. If you have time, modify your mockup based on user feedback. If you don't have time to modify the mockup, make sure you take user feedback seriously and consider the feedback when you're implementing the product.
There are all kinds of investors from venture capital firms, to individual "angels", to companies who have a big sales team but no development expertise. If you're looking for VC or angel money, you don't need a finished product, but you do need to show a lot of confidence and show them that you've considered all the aspects of the market, all aspects of the competition, and all the technical aspects. If you're looking to sell your product to a company, you probably need a finished product so the sales team can get behind it right away. Don't be afraid of the economy. There is still a lot of money out there; it's just that investors aren't throwing their money away. They want a sure bet now.
The main thing is to have fun so don't get too stressed!
We have in fact begun the mock up process. I have much of the research in place. I like the suggestion that we can look at this as a mock up and not feel tied to it as the project progresses.
I really appreciate the information you've provided.
