New website idea, just need the right team of people!!

thomas98798

Corinthian you have no faith in me at all

The Corinthian wrote: »

I think he's realized this and either has gone off to do this, or has given up, as he essentially admitted it and stopped posting.

I've been researching my idea, and can't believe how many responses this has received. Enjoyed the thread drift about cloud computing, very interesting.

Just to give an update.
From reading all of the previous comments my focus has now turned from who I need, to what ground work I need to complete before I go to step 1.
I think excitement got the better of me and I jumped to making a prototype before I had even evaluated the initial business model. So for the time being its back to the drawing board.

clint_silver wrote: »

So he goes to company X. Tells them what hes looking for, they say figure X, he then has to go investors looking for it.

Clint this is something I will probably look into further down the line, but I was just wondering what protection do you have from your idea being completely ripped off by such a company? Or is that just the risk you take?

ChRoMe

thomas98798 wrote: »

From reading all of the previous comments my focus has now turned from who I need, to what ground work I need to complete before I go to step 1.
I think excitement got the better of me and I jumped to making a prototype before I had even evaluated the initial business model. So for the time being its back to the drawing board.

Smart move, its completely reasonable to get excited and want to jump in feet first, we all do it on occasion.

Good luck.

The Corinthian

thomas98798 wrote: »

Corinthian you have no faith in me at all

I've no idea who you are, so I'm hardly going to have much faith in you

Seriously though, you get two or three threads with people with an 'idea' here per week. I'd estimate that well under 5% of these ever get beyond even the initial 'idea' stage, as the principles behind them realize that it might actually involve a lot of time and effort to bring them to fruition and so quietly drop them.

From reading all of the previous comments my focus has now turned from who I need, to what ground work I need to complete before I go to step 1.

Very wise, IMHO.

Clint this is something I will probably look into further down the line, but I was just wondering what protection do you have from your idea being completely ripped off by such a company? Or is that just the risk you take?

You can get them to sign a standard Non-Disclosure Agreement (NDA) before discussing anything; you'll find plenty of examples on the Web you can download and amend to suit your purposes, and this will give a modicum of protection against the other party stealing or discussing your 'idea' with third parties and it's common practice to sign them, so you'll not be out of place when you pull one out at the start of a meeting.

In reality though, 'ideas' are overrated as it is the execution that makes the difference, not the 'idea'; all you need do is look at someone like Thomas Edison and those who competed against him - often they had the 'idea' first, and brought it out first, but ultimately he was the one who repeatedly made it commercially successful. I'd rather have a mediocre 'idea' with excellent execution than an excellent 'idea' with mediocre execution any day.

And even if your 'idea' is a game changer, the person you tell would have to have the inclination, will, lack of ethics and opportunity to 'steal' it from you. Very, very, very few ever do have all of those qualities and thus don't bother.

Colonel Panic

The Corinthian wrote: »

In reality though, 'ideas' are overrated as it is the execution that makes the difference, not the 'idea'; all you need do is look at someone like Thomas Edison and those who competed against him - often they had the 'idea' first, and brought it out first, but ultimately he was the one who repeatedly made it commercially successful. I'd rather have a mediocre 'idea' with excellent execution than an excellent 'idea' with mediocre execution any day.

100% agree with this. The obvious modern day equivalent would be what Apple do. There's a great talk Jobs did shortly after he returned to Apple praising the stuff smart people do, saying that Apple's job was to take all that and make good products.

fergalr

thomas98798 wrote: »

Clint this is something I will probably look into further down the line, but I was just wondering what protection do you have from your idea being completely ripped off by such a company? Or is that just the risk you take?

You should worry about them taking your money and time, not your idea.

You should worry that if they think your idea sucks, or is unworkable from a technical point of view, they won't tell you.

If you want to build a highly technical product, you need a technical cofounder. Otherwise you'll never be able to judge what is and is not technically possible, you won't be able to hire employees or consultants, and, finally, you will find it difficult to get funding.

The Corinthian wrote: »

You can get them to sign a standard Non-Disclosure Agreement (NDA) before discussing anything; you'll find plenty of examples on the Web you can download and amend to suit your purposes, and this will give a modicum of protection against the other party stealing or discussing your 'idea' with third parties and it's common practice to sign them, so you'll not be out of place when you pull one out at the start of a meeting.

Not the worst idea if you are hiring a consultancy; but think hard whether an NDA is even worth it. It will put some people off from talking to you.

Anyway, you should not talking to consultants. You need to grab a quiet drink in the pub with someone like the techies on this forum, make a judgement call that they probably won't take your idea, and ask them to please tell you honestly if there is anything impossible or really stupid about it.

The Corinthian wrote: »

In reality though, 'ideas' are overrated as it is the execution that makes the difference, not the 'idea'; all you need do is look at someone like Thomas Edison and those who competed against him - often they had the 'idea' first, and brought it out first, but ultimately he was the one who repeatedly made it commercially successful. I'd rather have a mediocre 'idea' with excellent execution than an excellent 'idea' with mediocre execution any day.

What Corinthian has said there is the standard way of thinking about ideas. Most people will tell you this.

Getting on a tangent, but I would disagree slightly:

First off, an idea does have a value.

This value can be close to zero.
If you tell me you are going to start a company working on a problem that I know is not solvable, then I know that idea is worth nothing.

Or, the value can be high.
Lets say your idea is to start a social network around 2002, targeting college kids.
We now know this idea has a high value. Difficult to quantify, but certainly valuable. Worth millions, I would say, given what I know about the last ten years. (with low confidence; counter factual reasoning...)

Hence, ideas can have a wide range of values, in an objective sense.


The reason that it is correct to assume a very low value for any particular idea, is because most ideas are terrible, or won't work out, typically for reasons that the people who conceive them cannot yet see.

If it is 2002, and you cannot see the future, then while you might be working on a social network, and while we now know that is a valuable idea, it would probably not be rational to value the idea very highly with the information state you have in 2002.

Unless you happen to have private information, that allows you see more of the future than people can in general. (Bearing in mind the chance you might be wrong, of course.)


So, how do you value your idea?
Well, maybe you were lucky, and chanced upon something that other people have not thought of, but that you think is valuable.
Probably you are wrong.

But if you have something about you in particular, that makes it possible for you to reason a bit more effectively than other people, then maybe you should value your idea a bit more.

This might be where you have worked in a particular domain that is unusual and valuable, or have some unusual experience.
Perhaps this experience lets you see a solution to a particular problem, or understand why something is valuable, in a way that others can't.

This is partly why accelerators and investors look for founders who are experts, or have a good track record in the area where they want to build their company. Such experience makes it possible that the founders have been able to see something valuable, before other people have.


If your idea isn't borne of some private expertise or experience, then its probably rational for you to value it very lowly.
It is certainly rational for everyone else to value your idea, which they know nothing about, close to zero.

The value you would get from talking to people about your idea probably far outweighs the value you lose by risking them stealing it, which is really the important question.
Especially if you aren't completely sure about it, don't know everything about the domain, how to build it, etc.


If you are an expert on what you want to build, or are trying to build something to solve a problem that you personally have unusual experience with, that causes you to see value where others have not, then it might be worth being more cautious.

But if in doubt, assume your idea is near valueless, and that the time you will save by finding that out fast, is worth a lot more than the risk of someone else building it instead of you.

The Corinthian wrote: »

And even if your 'idea' is a game changer, the person you tell would have to have the inclination, will, lack of ethics and opportunity to 'steal' it from you. Very, very, very few ever do have all of those qualities and thus don't bother.

That's the best protection, and best way to think about these things.

The Corinthian

fergalr wrote: »

You should worry about them taking your money and time, not your idea.

You should worry that if they think your idea sucks, or is unworkable from a technical point of view, they won't tell you.

That comes down to how ethical and competent the consultant is, just as it would come down to how good a developer is if you engage them to build a solution.

I've had a good bit of experience consulting for start-ups over the years and telling them their idea is crap can be 'difficult'. The main area where I've found where ideas fall down tends not to be technical, but the business model, especially where revenue is expected to come from - bizarrely this is often the least researched part of any such venture.

Where I've seen this, I've found the best way to break it to the client is to first explain to them from the onset that whatever business model they have at the onset, the one they'll end up with is almost certainly going to be radically different - which is often true of many enterprises. This makes it much easier for them to accept the flaws in their idea themselves, once it becomes apparent (after some market research), and will save them a lot of time and money not going on a wild goose-chase for revenue streams that don't exist.

I've seen plenty of developers and consultants who'll keep quiet too, even though they know the idea is a dog, but this tends to be because the client is hiring them only to build it - they don't get paid to assess or develop the business (and they could even lose income if they did tell the truth).

Not the worst idea if you are hiring a consultancy; but think hard whether an NDA is even worth it. It will put some people off from talking to you.

It'll only put off the amateurs. No professional firm or consultant would think twice about signing a standard NDA (given this, there's been some non-standard, 15+ page, NDA's that have given me pause over the years).

Anyway, you should not talking to consultants. You need to grab a quiet drink in the pub with someone like the techies on this forum, make a judgement call that they probably won't take your idea, and ask them to please tell you honestly if there is anything impossible or really stupid about it.

Why would they want to do this? I don't know about you, but my time's worth a lot more than a few pints (presuming they're even buying).

I can see where one may do so in the hope of getting business later on, but at such an early stage (where there's frankly only a 1% chance of it going any further - let alone to development), it's probably a poor investment of their time, unless they really are desperate for the work.

Lets say your idea is to start a social network around 2002, targeting college kids.
We now know this idea has a high value.

Not really. It has high potential value, but in itself has very little actual value.

To use your example, Facebook wasn't exactly the first social network site out there. Even if you ignore early communities such as Theglobe and Tripod, you already had Facebook-like sites such as SixDegrees.com in the late nineties - who already had gone bust long before Facebook appeared.

In the end it wasn't the idea that was a success; it was good execution of that idea - the right people, the right financials, the right identification and exploitation of revenue streams and, frankly, the right timing and luck, than made them successful.

I've genuinely seen some very good ideas fail, because they were badly executed (and/or unlucky). I've also seen more than a fair share of mediocre or 'bread and butter' ideas succeed because of good execution, timing and/or luck. The idea may have value, but ultimately only a potential value that principles have a tendency to take too seriously because they become emotionally invested in it.

So while I do agree that ideas have value, the problem is that far too much value is often ascribed to them, often to the exclusion of everything else.

fergalr

The Corinthian wrote: »

That comes down to how ethical and competent the consultant is, just as it would come down to how good a developer is if you engage them to build a solution.

Sure - I'm just pointing out that in the consultant case, there is a conflict-of-interest. There's probably also an adverse-selection factor at play, too - if you know very little about the tech, you are probably more likely to end up with a consultant who wants to take money from people who know very little about the tech.

That makes it quite a different issue than evaluating the goodness of a developer.

Again, I say that finding a technical co-founder is the right move; plus, its a good sanity check.

The Corinthian wrote: »

I've had a good bit of experience consulting for start-ups over the years and telling them their idea is crap can be 'difficult'. The main area where I've found where ideas fall down tends not to be technical, but the business model, especially where revenue is expected to come from - bizarrely this is often the least researched part of any such venture.

Where I've seen this, I've found the best way to break it to the client is to first explain to them from the onset that whatever business model they have at the onset, the one they'll end up with is almost certainly going to be radically different - which is often true of many enterprises. This makes it much easier for them to accept the flaws in their idea themselves, once it becomes apparent (after some market research), and will save them a lot of time and money not going on a wild goose-chase for revenue streams that don't exist.

Good on you, not every consultant will do that. Yes, its just being professional, but not everyone is.

The Corinthian wrote: »

I've seen plenty of developers and consultants who'll keep quiet too, even though they know the idea is a dog, but this tends to be because the client is hiring them only to build it - they don't get paid to assess or develop the business (and they could even lose income if they did tell the truth).

Thats the issue - too many people like that out there; and, if you know very little, you are more likely to blunder into one of them.

The Corinthian wrote: »

It'll only put off the amateurs. No professional firm or consultant would think twice about signing a standard NDA (given this, there's been some non-standard, 15+ page, NDA's that have given me pause over the years).

People in business themselves, in the VC space, or other startup people, will not sign an NDA unless they think there's a big enough upside for them.

Just in case they have, or advise, an existing venture in a similar space, or might want to start one in future, they don't want to take the risk of signing an NDA.
What happens if the entrepreneur starts describing a space close to what the advisor is operating in, such that information that the entrepreneur regards as confidential, the other person already knows? Can of worms. Sure, NDAs explicitly deal with that situation, but they also create a legal relationship, which you don't want to have with someone who later turns out to be trouble.

The Corinthian wrote: »

Why would they want to do this? I don't know about you, but my time's worth a lot more than a few pints (presuming they're even buying).

And yet, here we are, on post 67...

Helping out, paying it forward, out of interest? - something like that, I guess.

The Corinthian wrote: »

I can see where one may do so in the hope of getting business later on, but at such an early stage (where there's frankly only a 1% chance of it going any further - let alone to development), it's probably a poor investment of their time, unless they really are desperate for the work.

Not really. It has high potential value, but in itself has very little actual value.

To use your example, Facebook wasn't exactly the first social network site out there. Even if you ignore early communities such as Theglobe and Tripod, you already had Facebook-like sites such as SixDegrees.com in the late nineties - who already had gone bust long before Facebook appeared.

Sure, I remember sixdegrees - the e-mails from the CEO "Im the CEO of six degrees, you dont know me, but I know someone who knows you - X, perhaps?" and I remember thinking 'who the hell is this guy?'

The Corinthian wrote: »

In the end it wasn't the idea that was a success; it was good execution of that idea - the right people, the right financials, the right identification and exploitation of revenue streams and, frankly, the right timing and luck, than made them successful.

I've genuinely seen some very good ideas fail, because they were badly executed (and/or unlucky). I've also seen more than a fair share of mediocre or 'bread and butter' ideas succeed because of good execution, timing and/or luck. The idea may have value, but ultimately only a potential value that principles have a tendency to take too seriously because they become emotionally invested in it.

So while I do agree that ideas have value, the problem is that far too much value is often ascribed to them, often to the exclusion of everything else.

Yeah - sure - most enterpreneurs overvalue their individual idea.

The Corinthian wrote: »

Not really. It has high potential value, but in itself has very little actual value.

Not sure exactly what you mean, by this, beyond the distinctions I made in the last post.
So... here:


Lets consider a piece of information, in the form of a statement, S:
"Someone will build a college social network into a ~$100B company by 2012".

What is the value of S to us, here in 2013?
Close to zero.
S is publicly and popularly known information.

But what is the value of S in 2002?
Would it be $100B?
No, not even close.
Even knowing S, you don't get $100B until 2012 - and that's if you manage to take S, and build the one company described by S. There's vast execution risk, of course.

There were maybe 100 social network companies, and only 1 made it.


But is the value of S, in 2002, zero?

No way. I argue that S, if a credible statement, is worth millions of dollars in 2002; possibly tens of millions.

I think that if you told a VC firm that they had the ability to credibly communicate S back in time to themseleves in 2002, they would pay tens of millions of dollars for that opportunity.
I'm sure that the board of Google or Microsoft would pay a similar amount.


Think about how the VC business operates.
VCs look for the very small number of firms that can hit massive payouts, in the 100s of millions or billion dollar ranges.
They make many investments, knowing that most investments will fail.
They only really care about the very small number of companies that can hit the huge long-shot payout.
They burn many millions, investing it into companies that don't have the long-shot potential, essentially as an insurance policy against the small chance that one of the firms does have a long-shot potential of a billion dollars.

Now, its true that no firm will create that kind of value, without good execution.

But while execution ability will differentiate one average-joe from the other, its not really the primary differentiater of a million dollar company from a 100B dollar company.

If you had put Mark Zuckerberg in the sandwich shop business, I don't think he's going to make you a $100B sandwich business in 10 years; there's just not enough scalability or upside to that market.

There are probably a lot more people out there with good execution capability, than there are with $100B ideas.
Its also probably possible to buy in execution capability, more so that it is to buy in a $100B idea.
Honestly, you can see this if you look at how early stage startups are funded. VC firms do not just assemble a good team of execution experts and give them a pile of money. VCs care a lot about the potential upside, market opportunity, etc. Further, I would argue that a lot of the 'team' analysis that is done, is done on not just on execution, but also on whether this team is likely to have seen a gap, or need, due to their specialised understanding of the domain.

"I have 10 years execution experience successfully running a 100 person mining company, and I have identified a gap in the primary healthcare market" is going to be much less compelling than "I have 10 years execution experience successfully running a 100 person mining company, and I have identified a gap in the mine management business", even though the execution experience is the same.


Now, that was all assuming you could communicate S credibly back to the past.
Of course, you can't.

So you have to also build into your model the chance that the private information you have - your idea - is actually wrong, and not S at all. If you only have a 1% chance of your idea being S, then maybe you want to multiply the value of S by 0.01 to get the value of your idea of S.

In the last post I talked about how people with private information that made their idea more likely to be worth more would have a much closer correspondance between their idea, and a correct idea S.


So, how much is an idea worth? There's definitely some times when its non-zero; maybe tens, or hundreds of K; thats all I'm arguing.


All of this is from an overview, long-run, view of the market, so is closer to how VCs approach things.

As a non-rich individual, none of this really matters, as your utility function of additional money is non-linear, so it is irrational to take on higher expected-value but higher variance bets, without penalising very heavily for the variance.

E.g. counter-intuitively, a 0.01 chance of $100B (that you can't lay-off) is worth a lot less to a non-rich individual than a 0.1 chance of $10M.

Hence you have to think about your ideas differently, and you should be eager to trade down expected value, in a return for a reduction in variance - hence it makes a lot of sense to get feedback early.

The Corinthian

fergalr wrote: »

Sure - I'm just pointing out that in the consultant case, there is a conflict-of-interest.

Depends on what the consultant is hired to do.

All too often, start-ups will hire consultants as developers, nothing else. In that scenario there is a conflict of interests in that even if the consultant(s) know that the idea is a dog, they're not actually going to warn the client because that could lose them the work.

That's why, if a potential start-up is going to bring in a technical resource at the start, be it a partner or hired consultant (or consultancy), it's probably better they bring in an analyst rather than a developer, because you'll want to develop the business idea before you want to build it.

Again, I say that finding a technical co-founder is the right move; plus, its a good sanity check.

Ideally. The thing is that finding someone with that skill set and experience isn't that easy and convincing them to leave an often lucrative career for a speculative start-up is much harder still.

People in business themselves, in the VC space, or other startup people, will not sign an NDA unless they think there's a big enough upside for them.

Only inexperienced ones. Unless the NDA is particularly restrictive, no one with any experience gives a second thought about signing them. The only people who can refuse to sign one are those who are in a position to do so because you need them, and they know it.

What happens if the entrepreneur starts describing a space close to what the advisor is operating in, such that information that the entrepreneur regards as confidential, the other person already knows? Can of worms. Sure, NDAs explicitly deal with that situation, but they also create a legal relationship, which you don't want to have with someone who later turns out to be trouble.

Same as 'non-compete' clauses in employment contracts. For one to breach a standard NDA, you realistically would have to seriously and pretty blatantly copy the idea. Don't overestimate the power of an NDA.

Helping out, paying it forward, out of interest? - something like that, I guess.

If you want a friend, buy a dog.

I think that if you told a VC firm that they had the ability to credibly communicate S back in time to themseleves in 2002, they would pay tens of millions of dollars for that opportunity.

Of course, but that's not the idea you're selling to the VC, it's the execution of the idea that you're selling.

Think about how the VC business operates.

There's no single way VC's operate. Vanity is a large part of how some choose their investments. With others, they're natural gamblers. Others are bricks and mortar bean-counters.

I've dealt with a good few over the years and they vary wildly in character, wealth, risk aversion and ability. I've had Irish one's who'll put you over the coals for €25k and Liechtensteiner one's who'll sign a check for ten times that after one meeting.

But while execution ability will differentiate one average-joe from the other, its not really the primary differentiater of a million dollar company from a 100B dollar company.

It is, I assure you. I've been dealing with VC's for years, so you'll forgive me if I disagree with you.

There are probably a lot more people out there with good execution capability, than there are with $100B ideas.

The opposite, in my experience.

Its also probably possible to buy in execution capability, more so that it is to buy in a $100B idea.

Assuming you can execute that bit of recruitment without making a mess of it. Or it even occurs to you to do so; how many entrepreneurs hand over management to someone else from day one, out of interest?

Of course, ideas are important. A good businessperson will turn a profit on a crap idea, but those profits will ultimately be held back by the limitations of that idea. But they will still turn a profit, while the poor business man will turn none, no matter how good their idea is.

Setun

Very interesting to read this thread I must say - but for me a strong aspect to consider is something that was mentioned on the very first page:

Evil Phil wrote:

And that's where you lost pretty much everybody. Social media has been done, in fact the bubble burst when instagram sold for $1 billion.

What exactly makes you think that people want another social network? Are you familiar with the concept of social media fatigue? The latter point for me cannot be downplayed imo, and I think it's something we will hear more of this year. Anecdotally (I've been monitoring this as part of my current masters research), the prevailing attitude in the mass media (both conservative and liberal news streams) is turning to a subtly anti-social-networking stance, with articles about privacy and harassment regularly recurring everywhere from the Guardian to the Daily Mail. Social networking has lost its novelty, and serious questions about the valuations of the biggest brands in the business are being asked, as well as the ethics of their revenue models and Terms of Service agreements. The Facebook IPO has altered the way venture capitalists consider social media and investment - so the next generation will have to function in a very different way.

Also, how is your idea financially sustainable in the long term? Do you see it as being funded through the selling of user content to third parties (i.e. targeted advertising, marketing etc)? Or do you hope to allow users to retain their autonomy and instead ask them for an annual subscription fee? I suggest you read about app.net if you haven't fully considered the latter option.

Edit: IMO a very useful article on The Atlantic.

fergalr

The Corinthian wrote: »

Ideally. The thing is that finding someone with that skill set and experience isn't that easy and convincing them to leave an often lucrative career for a speculative start-up is much harder still.

Yes - this is why its a good hurdle for a new entrepreneur to have jumped, before spending their own money.

The Corinthian wrote: »

Same as 'non-compete' clauses in employment contracts. For one to breach a standard NDA, you realistically would have to seriously and pretty blatantly copy the idea. Don't overestimate the power of an NDA.

Yeah, if you are talking about pursuing breach in court.
What if you are talking about the risk that a erstwhile entrepreneur, who feels jilted (unfairly) starts sending you solicitor letters, which you then have to disclose during diligence, or pay to make go away?

Thats more of a risk than losing in court.

I wouldn't sign an NDA with someone unless I knew/trusted them, or unless there was an fair upside in it for me (e.g. as a precursor to signing a contract for money).

The Corinthian wrote: »

If you want a friend, buy a dog.

Haha - can't argue with that.

The Corinthian wrote: »

Of course, but that's not the idea you're selling to the VC, it's the execution of the idea that you're selling.

I argue you are selling both.
The idea, and the promise that the idea is genuinely good because of the teams background, are big factors.

The Corinthian wrote: »

There's no single way VC's operate. Vanity is a large part of how some choose their investments. With others, they're natural gamblers. Others are bricks and mortar bean-counters.

I've dealt with a good few over the years and they vary wildly in character, wealth, risk aversion and ability. I've had Irish one's who'll put you over the coals for €25k and Liechtensteiner one's who'll sign a check for ten times that after one meeting.

It is, I assure you. I've been dealing with VC's for years, so you'll forgive me if I disagree with you.

Fair enough - I defer to your experience.

The Corinthian wrote: »

...
Of course, ideas are important. A good businessperson will turn a profit on a crap idea, but those profits will ultimately be held back by the limitations of that idea. But they will still turn a profit, while the poor business man will turn none, no matter how good their idea is.

I agree, and I think thats a fine way of thinking about business.

But, in the 'grow huge or fail' school of thought, you want to back a less good business person with a higher upside idea - because you aren't interested in incremental returns.


Interesting topic, even if we're getting a little away from the OPs questions.

croo

Quote:
People in business themselves, in the VC space, or other startup people, will not sign an NDA unless they think there's a big enough upside for them.

Only inexperienced ones. Unless the NDA is particularly restrictive, no one with any experience gives a second thought about signing them. The only people who can refuse to sign one are those who are in a position to do so because you need them, and they know it.

I think there is a growing understanding that signing NDA's is not necessarily a good idea.

I recently read an good article on the topic... not sure if this link was it but the thoughts expressed amount to the same.
http://blog.jpl-consulting.com/2012/04/why-i-wont-sign-your-nda/

professore

I think your best bet is to get the concept working using something like Elgg or whatever, use this to get VC's, bank managers, enterprise ireland etc interested.

THEN you can re-write the whole thing. Of course you also need to first hire someone who can give you some general idea of how much the final system will cost and double the time and money estimate

Unless of course you have €500K - € 1 million burning a hole in your pocket ...

areyawell

If you want anything evenly remotely similar to Facebook your going to need around 15 or 20 programmers and could take a year or longer to build something decent so that people will actually register and use it and still never be as good as Facebook who employ thousands.

You are generally looking at a couple of million which includes hosting,office, electricity,heating,insurance,computers, human resources, accountant,managers, software developers and the most important advertising.

Don't think that when the website is done you won't need any software developers, you will still need them all.

Best thing to do yourself is just buy a domain, learn some programming and make a Facebook page advertising the site and go from there.

Are you sure this website idea you have isn't already on the net? It really sounds OP you have no idea about what it takes to run a website and to get traffic onto it.

The Corinthian

fergalr wrote: »

Yes - this is why its a good hurdle for a new entrepreneur to have jumped, before spending their own money.

Bit of a non sequitur?

Yeah, if you are talking about pursuing breach in court.
What if you are talking about the risk that a erstwhile entrepreneur, who feels jilted (unfairly) starts sending you solicitor letters, which you then have to disclose during diligence, or pay to make go away?

If it gets to actual legal action (not solicitors letters) then they'll lose and I'll seek costs awarded against them. And unless you really are a Muppet who rips off the idea verbatim, or have not kept any records, then they will lose.

I argue you are selling both.
The idea, and the promise that the idea is genuinely good because of the teams background, are big factors.

We're really discussing the initial idea here, not one that's been developed, tempered, changed and ultimately made workable and profitable through competent analysis.

But, in the 'grow huge or fail' school of thought, you want to back a less good business person with a higher upside idea - because you aren't interested in incremental returns.

If someone wants to back a poor businessperson with a good idea, then they're an idiot. If you really want to play long shots, play the Lotto.

croo wrote: »

I think there is a growing understanding that signing NDA's is not necessarily a good idea.

I don't think that most bog standard NDA's are a major problem, and I do agree that in reality they're a waste of time. I certainly would be worried about signing any more complex NDA's; I've seen some scary ones in my time. However, most NDA's are harmless, confort blankets.

I recently read an good article on the topic... not sure if this link was it but the thoughts expressed amount to the same.
http://blog.jpl-consulting.com/2012/04/why-i-wont-sign-your-nda/

Nice article - the 'Ideas are Plentiful, Good Execution is Scarce' bit sounded familiar

An interesting observation was that:

"If you prize your idea so much (in relation to everything else it will take in order to make it succeed) that you feel the need to put in legal protections from me, it’s a tell that you don’t have much going for you in this endeavor."

That's very true. Mainly because all to often they'll come up to you with an idea and nothing else, which is why they need an NDA in the first place - the idea is all they have and they could easily be replaced.

professore wrote: »

I think your best bet is to get the concept working using something like Elgg or whatever, use this to get VC's, bank managers, enterprise ireland etc interested.

Don't bother raising money in Ireland. It's a two-bit financial market where every investment is treated like a horse trade. Look instead at the UK, Germany, Holland, Luxembourg, Switzerland and Lichtenstein.

Edit: Do go after all the low-hanging Irish fruit though; feasibility grants, and other government schemes and funding. It's the Irish VC and investor market I'd not bother with.

fergalr

The Corinthian wrote: »

Bit of a non sequitur?

Not as far as I can see.

The Corinthian wrote: »

If it gets to actual legal action (not solicitors letters) then they'll lose and I'll seek costs awarded against them.

Yeah, but the point is that you don't want to ever have to deal with legal action; too distracting, hurts ability to close investment, etc; so you have to be careful about opening yourself up to that risk.

I agree with pretty much everything in that article that Croo linked to.

The Corinthian wrote: »

We're really discussing the initial idea here, not one that's been developed, tempered, changed and ultimately made workable and profitable through competent analysis.

Hmm; that seems slightly 'no true scotsman'-esque, but fair enough.

For someone with deep knowledge about a particular domain, their idea might have most of those properties, even at quite an early stage. Unlikely, but possible..

The Corinthian wrote: »

If someone wants to back a poor businessperson with a good idea, then they're an idiot. If you really want to play long shots, play the Lotto.

Of course lotto is long odds, but negative expected value; whereas VC funds would say that while their individual bets are also long odds, they have positive expected value. I believe there are plenty of situations where VCs have backed inexperienced or unproven teams, because of a sexy domain, or a long shot at a big market; rather than a more polished team doing something thats just not 'hot' enough.

The Corinthian wrote: »

Don't bother raising money in Ireland. It's a two-bit financial market where every investment is treated like a horse trade. Look instead at the UK, Germany, Holland, Luxembourg, Switzerland and Lichtenstein.

Edit: Do go after all the low-hanging Irish fruit though; feasibility grants, and other government schemes and funding. It's the Irish VC and investor market I'd not bother with.

That's very interesting.
How do you go about making contact with VCs in those other countries, as an Irish startup?
Are european investors more willing to deal with Irish companies, than US investors? US investors can be uninterested in non-US companies.

jmcc

I love these threads. So many people willing to give their opinion on scalability and large scale website development. Some posters have actually posted worthwhile replies though.

1. Scalability has to be designed in to such a site from the start.
A large scale site is quite different to the average tiny Wordpress or Joomla site. Decisions about whether to scale horizontally (lots of servers) or vertically have to be made at this stage and some sites might be better with a hybrid approach.

2. Cloud is not a solution but rather an option.
Merely flinging hardware (virtual or real) at a problem isn't a solution. You have to know exactly what you need to do, how to do it, and how many servers it will take.

3. Get the hosting angle wrong and you are completely f*cked.
You don't host large scale sites on shared hosting. If one part of the site goes down (the database server for example) then it can take it all down. If there are multiple db servers these might need to talk to each other so intra-network issues might be important.

4. Get the software angle wrong and ditto.
You may be combining a number of languages and SQL to produce a working site. The limitations of each language have to be examined first. Modularity and reuse become important at large scale site levels.

5. Designing for 100K users is different to designing for 10K.
This gets back to the database issue. The queries for 100K users are going to be much larger than that for 10K or 1K users. This means that the database architecture and the db servers have to be able to cope and scale - especially if there are many reads and writes per user page.

6. Database architecture and design is going to be very important.
See above. You may have to have some master-slave setup to scale the site. Doing it all one one single db server might be highly problematic and it leaves no hot spare or backup in place.

7. The site is like an iceberg and the user only sees about 10% of it.
The user often hasn't a clue what goes on under the hood and if the site crashes or slows up during peak time then they are likely to go elsewhere.

8. Most web development companies have no experience with large scale sites.
Designing some flash brochureware with minimal interaction with users is not the same as designing a site with a lot of users and loads of simultaneous read and write queries.

9. Can you afford to fund the development of a large site?
All this stuff has to work together and stay working. It may be months before it can get out of alpha stage. You may well have to fund the site for a year or more before it makes money. Dreaming about such ideas is all very well but this is a business rather than a toy and it should be approached as such.

Regards...jmcc

GreeBo

Colonel Panic wrote: »

I get what you mean, I find it hard to resist smirking at Cloud as Golden Hammer suggestions myself and I'm actually a little wary of it having been put in an awkward position developing apps for cloud based platforms in the past where the platform and app didn't gel well together.

I think the debate is much ado about nothing really, I got the impression ChRoMe was just dismissing the concept of being able to scale with hardware as a Bad Thing when this is far from the truth.

If you are following EIP shouldnt your code be platform agnostic really?

I would entirely agree, you cant and shouldnt dismiss cloud solutions in the same way that 10 years ago you shouldnt dismiss vast server farms of cheap hardware.
But none of this will help you if your app is written incorrectly to begin with.

cerebus

The Corinthian wrote: »

fergalr wrote:

People in business themselves, in the VC space, or other startup people, will not sign an NDA unless they think there's a big enough upside for them.

Only inexperienced ones. Unless the NDA is particularly restrictive, no one with any experience gives a second thought about signing them. The only people who can refuse to sign one are those who are in a position to do so because you need them, and they know it.

I can't speak for Ireland/UK, but I can tell you that I work in Silicon Valley as a VC, and will almost never (ever) sign an NDA. The same goes for pretty much every other firm/investor in the valley.

Lots of reasons - some examples:
1. A firm/VC often sees multiple companies in the same space, so it would restrict their ability to invest
2. Don't have the infrastructure to make sure a firm is complying with NDAs - could see 1000s of pitches a year, that would be a lot of paper
2a Sort of related - an investor you want to work with is going to be very busy, so refusing to pitch without an NDA means some other entrepreneur gets that slot on the investor's calendar - having to clear an NDA hurdle makes it very likely they will decline a meeting
3. Restricts ability to work with existing portfolio - fiduciary duty is to shareholders of existing investments and LPs in the venture fund

So, word to the wise: if you are pitching US investors, think long and hard about asking for an NDA.

areyawell

No idea what it takes to even support a website even with a 10,000 users.

You will need a couple of top of the range programmers that will cost 100k per year

Few Programmmers that will cost like 60K a year, and plenty of more cheaper ones.

human resources, law team, accountants, marketing team, administrators and plenty more. Even if the site is up and running you will still all the programmers.

Bandwith, office etc

Unless you have some sort of viable platoform allready with 20,000 users you have no hope of getting funding.

Facebook was set up by friends, with feck all users and got business people to invest.

Unless you have a working platform, u wont get funding, feel free to PM and I can start working on it.

Look what happened to bebo, if you have a good idea these days and its made half crap, google, yahoo and microsoft will just make a better site.

Is your idea someway copyrighted which can also cost a hundred grand

The Corinthian

fergalr wrote: »

Yeah, but the point is that you don't want to ever have to deal with legal action; too distracting, hurts ability to close investment, etc; so you have to be careful about opening yourself up to that risk.

There are always going to be dangers of opening yourself up to risks of legal liability in any business and, TBH, I've found that NDA's represent a pretty low one in that regard. Far more likely is that the client decides that the reason their business didn't get off the ground was down to the consultant's fault.

With or without an NDA, you're going to have to learn how to act with due diligence.

Of course lotto is long odds, but negative expected value; whereas VC funds would say that while their individual bets are also long odds, they have positive expected value. I believe there are plenty of situations where VCs have backed inexperienced or unproven teams, because of a sexy domain, or a long shot at a big market; rather than a more polished team doing something thats just not 'hot' enough.

I didn't mention inexperienced or unproven businesspersons, I was talking about poor businesspersons.

How do you go about making contact with VCs in those other countries, as an Irish startup?

You hire someone like me or you can research, identify and approach them directly.

Are european investors more willing to deal with Irish companies, than US investors? US investors can be uninterested in non-US companies.

I have no experience of the US VC scene.

cerebus wrote: »

So, word to the wise: if you are pitching US investors, think long and hard about asking for an NDA.

I wouldn't ask a VC to sign an NDA, unless it was for something very, very, very specific (such as direct access to an algorithm).

I suggested to the OP that they could use an NDA, when meeting with a consultant, developer or potential partner and made little secret that I consider most of these documents to be little more than safety blankets.

By the time they get to a VC, they should be advanced in the idea to the point that it really is no longer worth anyone's while to try and steal it (if they're even bothered), so if they still need an NDA to protect the idea, then someone doing so is going to be the least of their worries.

areyawell wrote: »

No idea what it takes to even support a website even with a 10,000 users.

Depends on the business model behind the site.

I remember when Daft.ie was still run by the two brothers behind it and sitting on a virtual server (albeit, with only a few low-traffic, brochureware, sites on the same box), even though it was already servicing a significantly higher user-base than 10,000.

Another site I know, which was subscription based, required a full-time support team being hired to hand-hold the subscribed user-base of well under 10,000.

Giblet

jmcc wrote: »

I love these threads. So many people willing to give their opinion on scalability and large scale website development. Some posters have actually posted worthwhile replies though.

1. Scalability has to be designed in to such a site from the start.
A large scale site is quite different to the average tiny Wordpress or Joomla site. Decisions about whether to scale horizontally (lots of servers) or vertically have to be made at this stage and some sites might be better with a hybrid approach.

2. Cloud is not a solution but rather an option.
Merely flinging hardware (virtual or real) at a problem isn't a solution. You have to know exactly what you need to do, how to do it, and how many servers it will take.

3. Get the hosting angle wrong and you are completely f*cked.
You don't host large scale sites on shared hosting. If one part of the site goes down (the database server for example) then it can take it all down. If there are multiple db servers these might need to talk to each other so intra-network issues might be important.

4. Get the software angle wrong and ditto.
You may be combining a number of languages and SQL to produce a working site. The limitations of each language have to be examined first. Modularity and reuse become important at large scale site levels.

5. Designing for 100K users is different to designing for 10K.
This gets back to the database issue. The queries for 100K users are going to be much larger than that for 10K or 1K users. This means that the database architecture and the db servers have to be able to cope and scale - especially if there are many reads and writes per user page.

6. Database architecture and design is going to be very important.
See above. You may have to have some master-slave setup to scale the site. Doing it all one one single db server might be highly problematic and it leaves no hot spare or backup in place.

7. The site is like an iceberg and the user only sees about 10% of it.
The user often hasn't a clue what goes on under the hood and if the site crashes or slows up during peak time then they are likely to go elsewhere.

8. Most web development companies have no experience with large scale sites.
Designing some flash brochureware with minimal interaction with users is not the same as designing a site with a lot of users and loads of simultaneous read and write queries.

9. Can you afford to fund the development of a large site?
All this stuff has to work together and stay working. It may be months before it can get out of alpha stage. You may well have to fund the site for a year or more before it makes money. Dreaming about such ideas is all very well but this is a business rather than a toy and it should be approached as such.

Regards...jmcc

All good advice, but I get the feeling the OP is nowhere near this point yet.

desaparecidos

The Corinthian wrote: »

.... as there's a frightening number of same who still don't seem to have grasped the basic client-server paradigm.

+1 * 1,000,000!

The amount of paid "web developers" who just haven't a notion about the basics web development is depressing.

What can we expect when companies insist on hiring graduate software developers with zero web exposure.

One guy I had to sit down and draw diagrams of how a client and server interact.

Another was including a script link to jQuery before every slider/modal/whatever plugin he copied and pasted from Google searches. Didn't seem to figure multiple references to jQuery on a single page was silly.

jmcc

Giblet wrote: »

All good advice, but I get the feeling the OP is nowhere near this point yet.

Yep but if you can't define the problem then you can't figure out what/who you need to solve it and how to solve it.

Regards...jmcc

ChRoMe

desaparecidos wrote: »

+1 * 1,000,000!

The amount of paid "web developers" who just haven't a notion about the basics web development is depressing.

Really? I love it, as it dramatically inflates my salary

iMyself

I think the OP is taking the wrong approach. What you need is a very simple but brilliant idea that hasn't been done before and build it small scale. You also need a well established network (as in real peoplein the real world) where you can get your idea out and hope that the right investor takes interest. The right investor will be someone with the vision and money to bring your simple small scale idea global.

the problem is, simple brilliant ideas that haven't been done before do not come aboput too often. They usually spawn out of new technology and you need to be in the right place at the right time with the right idea that fits that technology perfectly.

the approach the OP is taking is something similar to what Microsoft would do. They are titans and have the money, skills and network to take an idea that has already been done and make it bigger, possibly better, but pretty much the same only a bit different. It's not an approach you should take when planning a start up company.

ChRoMe

iMyself wrote: »

What you need is a very simple but brilliant idea that hasn't been done before and build it small scale.

Google wasn't the first search engine, facebook wasn't the first social network etc.

All you need to do is execute the concept a little bit better than everyone else.

iMyself

ChRoMe wrote: »

Google wasn't the first search engine, facebook wasn't the first social network etc.

All you need to do is execute the concept a little bit better than everyone else.

OK yes that is true I suppose. But my main point is that you do not start off with delusions of grandeur, I'm going to build the next Facebook with 100's of thousands of users from the get go. A better approach is to demonstrate your idea on a smaller scale, get a good business plan together and look for the investment. What is it that is better than facebook? concentrate on that specific part and build your business plan and initial demo's on that.

Of course it is always possible to get a business going without much initial investment (a loan or remortgage the house pre recession times), provided you can do the programming yourself and provided it's something manageable (say an online adverts website for example). But I think the OP is looking to hire people to do the work, and as has already been pointed out he'll need to pay these developers handsomely. It's not the sort of thing you can expect a junior sub 50K salary 2-3 years experience developer to be able to handle.

The Corinthian

iMyself wrote: »

OK yes that is true I suppose. But my main point is that you do not start off with delusions of grandeur, I'm going to build the next Facebook with 100's of thousands of users from the get go.

While I broadly agree with this point, I would probably better describe it as unrealistic expectations. By this I don't mean unrealistic in the sense of a start-up erroneously believing that they may become the next Facebook, more how they will become the next Facebook.

In this regard, I've seen quite a good business ideas, that are often ruined by having very poor business models, based upon (typically untested) market assumptions and overly optimistic growth forecasts. Principles in such ventures will often become too emotionally invested in these ideas, precluding the essential ability to critically assess and refine them, and end up chasing phantom markets long after anyone else would objectively have moved on.

Of course it is always possible to get a business going without much initial investment (a loan or remortgage the house pre recession times), provided you can do the programming yourself and provided it's something manageable (say an online adverts website for example).

I've found that outside of consultancy-based businesses, you're generally going to have to put your hand in your pocket, even if you technically have all the skills to run the business and supply whatever good or service it promises.

For example, any would-be entrepreneur can easily set up a premium rate SMS service. Connections are not difficult to get at low rates, or even on a pure revenue share basis, and there's still money to be made in the old style PSMS services in markets where feature phones make up the bulk of what people have (i.e. the developing World).

If you have the technical skills, supplying the service is easy - you can knock up one easily in under a week, from scratch. However, even with your service up and running, you still need to get people to use it and that requires a large marketing budget. Very large; I can tell you from experience that those companies that became successful in this area had to spend five figure sums per month in advertising, from the very beginning, and support this spend without seeing a penny back for quite a while at the start.

But I think the OP is looking to hire people to do the work, and as has already been pointed out he'll need to pay these developers handsomely. It's not the sort of thing you can expect a junior sub 50K salary 2-3 years experience developer to be able to handle.

TBH, this thread ceased to be about the OP a while back.

However, you're right; if you want someone with the skills you need to pay for those skills. This means that if you want to pay them a fee, then you'll be paying market rates and if you want to pay them with sweat equity, you need to consider those market rates and the risk they're taking, as this too has a value attached.

Unfortunately this returns us to the aforementioned, unrealistic emotional investment of some principles. If you're coming to the table, often with little more than an idea, and offering someone 10% if they work for free to make this idea become a reality - without any guarantee that it will succeed - then you're not going to convince the people you need, only those too naieve to know any better. And they simply won't be able to contribute the skills necessary to differentiate your venture from one of the many 'also rans' out there.

jmcc

I wonder if this thread will be reignited each time "The Social Network" is shown on a TV channel? I hope they never make a movie about Google as I couldn't cope with the amount of search engine expertise that will magically appear here.

Regards...jmcc

onlyup

Evil Phil wrote: »

And that's where you lost pretty much everybody. Social media has been done, in fact the bubble burst when instagram sold for $1 billion. That doesn't mean there isn't money in it, just not the ridiculous money that was handed out like candy as angel funding because somebody said "Social Media" and/or "Disruption". Imho anway.

However, perhaps you're different. The Corinthian's post is spot on. To add my own two cent: technical details aren't that important at this stage - you can hire those skills in when you have seed capital. What you need to know is if there is a market for this offering of yours, how are you going to monetize your offering, and how you're going to fund your company and your life until you start making that money.

The web is social, it can't be "done".

Facebook overcame Friendster and MySpace
Google overcame Yahoo and others
Twitter survives in a world of Facebook
Instagram grew to 30m users before being bought
LinkedIn exists
Boards exists even though there are countless other message boards

just noticed this point was already made *shakes fist*