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You really need about a million dollars to make a marketable product. (not a lifestyle business) You can either put a million dollars of your own blood, sweat a

You really need about a million dollars to make a marketable product. (not a lifestyle business) You can either put a million dollars of your own blood, sweat and tears in, in which case it'll be the wildest ride of your life, or you can deploy capital. It looks like it's just code but it's not. There's a dizzying array of skills and knowledge you must be able to deploy effectively. If your product is not in an established industry and niche, if a bank can't understand you, that makes everything much, much harder. There's a reason franchises do so well. When you get started, you don't know what's going to hose you. It's easy in retrospect to say that they shouldn't have messed around with a business model requiring a bank partnership to get started without already having that partnership before building anything, but they didn't understand that going in.

gearoidoc 11y ago
"You really need about a million dollars to make a marketable product." wat? There are countless examples which disproves this (eg. Basecamp)
- jerf 11y ago
  "You can either put a million dollars of your own blood, sweat and tears in, in which case it'll be the wildest ride of your life, or you can deploy capital."
  - gearoidoc 11y ago
    Same thing. Are you telling me that to "make a marketable product" you would need to pay 10 engineers $100k for a year? Hell, just hire 5 engineers at $100k a year (which is expensive) and that still leaves you with a decent budget for marketing/sales/running costs. Certainly enough to make a marketable product. It's blatantly untrue no matter what way you cut it.
    - ssalazar 11y ago
      > Are you telling me that to "make a marketable product" you would need to pay 10 engineers $100k for a year? Engineering, product design, graphic design (these are not the same), marketing, and sales are all needed in various proportions, depending on the product, to make a "marketable product." Between all of those roles you could easily chew up $1million in 1 year when you account for e.g. ~2x salary:total cost of employee ratio and standard Silicon Valley compensation levels.
      - gearoidoc 11y ago
        > Engineering, product design, graphic design (these are not the same), marketing, and sales are all needed in various proportions, depending on the product, to make a "marketable product." I'm well aware. I've done this many times. > Between all of those roles you could easily chew up $1million in 1 year You could easily chewup $100 million too. Does that mean we should go ahead and say we can't make a marketable product for $100m? Of course not. Constraints are a fact of life - whether that be time/money/whatever. The challenge is getting to market given the resources at your disposal. > standard Silicon Valley compensation The business in question is based is OR. Also, and I'm going to sound facetious here but I'm really not trying to be, most businesses are not based in SV.
    - vinceguidry 11y ago
      Generally you double an engineer's salary to arrive at the total cost to the firm of retaining their services. So that's 5 engineers for a year. This article puts a final estimate at 2.7x: http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-cost.html http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-... You also need to realize just how new and unproven Lean Startup ideas are in the larger context of business. In that world, a million is just getting started. Most software products in the world took much much more than a million dollars to make. You have to pay the project managers, creative team, etc etc.
      - gearoidoc 11y ago
        > Generally you double an engineer's salary to arrive at the total cost to the firm of retaining their services. It's a fair point thought I do think 1-3 engineers is still plenty for "most" startup products to get to MVP (not universal but general rule of thumb). > You also need to realize just how new and unproven Lean Startup ideas are in the larger context of business. In that world, a million is just getting started. Most software products in the world took much much more than a million dollars to make. You have to pay the project managers, creative team, etc etc. Established (and assumedly) revenue generating software is not the topic of the discussion. The comment I was referring to was that $1m is needed to make a marketable product. Its a bogus claim.
mgkimsal 11y ago
> It's easy in retrospect to say that they shouldn't have messed around with a business model requiring a bank partnership to get started without already having that partnership before building anything, but they didn't understand that going in Doesn't have to be in retrospect. Why didn't any of the dozens of experienced investors they met with tell them this? "You're too early" is too wishy washy for them to have got the message.
- cookiecaper 11y ago
  Because it's rarely in someone's self-interest to give honest feedback, which is true for investors, potential employers, departing employees, and almost anyone else in a position to issue some type of denial. Instead, they part with something ambiguous, non-committal, and ideally flattering because it covers their butts and allows them to backpedal if necessary. Since the stated reason for declining the relationship is airy, you can't really get in a shouting match over it if the applicant/founder/whatever disagrees, and you don't offend them and preclude the possibility of future engagement. Politically and socially, it's almost always best to speak in platitudes, be ambiguous and non-committal, and refuse to give concrete information or rationale that could be used in the future to show that you were wrong about something. People usually do have a specific objection when they're turning down a request, but they just know that it doesn't help them to tell it to you, which is why it's always wise to cherish those who care enough about you to be honest.
  - bayonetz 11y ago
    This is so true. Honest feedback is so rare yet so useful I'm surprised there aren't more people in the business of selling it. The number of people who could use a good business coach, therapist, etc. far exceeds the number of people actually making use of one.
  - Udik 11y ago
    > Because it's rarely in someone's self-interest to give honest feedback, which is true for [...] almost anyone in a position to issue some type of denial. Instead, they part with something ambiguous, non-committal, and ideally flattering because it covers their butts and allows them to backpedal if necessary. I broke up with a girl a few hours ago and this sounds so cruelly true.

gearoidoc 11y ago

"You really need about a million dollars to make a marketable product." wat? There are countless examples which disproves this (eg. Basecamp)

jerf 11y ago
"You can either put a million dollars of your own blood, sweat and tears in, in which case it'll be the wildest ride of your life, or you can deploy capital."
- gearoidoc 11y ago
  Same thing. Are you telling me that to "make a marketable product" you would need to pay 10 engineers $100k for a year? Hell, just hire 5 engineers at $100k a year (which is expensive) and that still leaves you with a decent budget for marketing/sales/running costs. Certainly enough to make a marketable product. It's blatantly untrue no matter what way you cut it.
  - ssalazar 11y ago
    > Are you telling me that to "make a marketable product" you would need to pay 10 engineers $100k for a year? Engineering, product design, graphic design (these are not the same), marketing, and sales are all needed in various proportions, depending on the product, to make a "marketable product." Between all of those roles you could easily chew up $1million in 1 year when you account for e.g. ~2x salary:total cost of employee ratio and standard Silicon Valley compensation levels.
    - gearoidoc 11y ago
      > Engineering, product design, graphic design (these are not the same), marketing, and sales are all needed in various proportions, depending on the product, to make a "marketable product." I'm well aware. I've done this many times. > Between all of those roles you could easily chew up $1million in 1 year You could easily chewup $100 million too. Does that mean we should go ahead and say we can't make a marketable product for $100m? Of course not. Constraints are a fact of life - whether that be time/money/whatever. The challenge is getting to market given the resources at your disposal. > standard Silicon Valley compensation The business in question is based is OR. Also, and I'm going to sound facetious here but I'm really not trying to be, most businesses are not based in SV.
  - vinceguidry 11y ago
    Generally you double an engineer's salary to arrive at the total cost to the firm of retaining their services. So that's 5 engineers for a year. This article puts a final estimate at 2.7x: http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-cost.html http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-... You also need to realize just how new and unproven Lean Startup ideas are in the larger context of business. In that world, a million is just getting started. Most software products in the world took much much more than a million dollars to make. You have to pay the project managers, creative team, etc etc.
    - gearoidoc 11y ago
      > Generally you double an engineer's salary to arrive at the total cost to the firm of retaining their services. It's a fair point thought I do think 1-3 engineers is still plenty for "most" startup products to get to MVP (not universal but general rule of thumb). > You also need to realize just how new and unproven Lean Startup ideas are in the larger context of business. In that world, a million is just getting started. Most software products in the world took much much more than a million dollars to make. You have to pay the project managers, creative team, etc etc. Established (and assumedly) revenue generating software is not the topic of the discussion. The comment I was referring to was that $1m is needed to make a marketable product. Its a bogus claim.

mgkimsal 11y ago

> It's easy in retrospect to say that they shouldn't have messed around with a business model requiring a bank partnership to get started without already having that partnership before building anything, but they didn't understand that going in Doesn't have to be in retrospect. Why didn't any of the dozens of experienced investors they met with tell them this? "You're too early" is too wishy washy for them to have got the message.

cookiecaper 11y ago
Because it's rarely in someone's self-interest to give honest feedback, which is true for investors, potential employers, departing employees, and almost anyone else in a position to issue some type of denial. Instead, they part with something ambiguous, non-committal, and ideally flattering because it covers their butts and allows them to backpedal if necessary. Since the stated reason for declining the relationship is airy, you can't really get in a shouting match over it if the applicant/founder/whatever disagrees, and you don't offend them and preclude the possibility of future engagement. Politically and socially, it's almost always best to speak in platitudes, be ambiguous and non-committal, and refuse to give concrete information or rationale that could be used in the future to show that you were wrong about something. People usually do have a specific objection when they're turning down a request, but they just know that it doesn't help them to tell it to you, which is why it's always wise to cherish those who care enough about you to be honest.
- bayonetz 11y ago
  This is so true. Honest feedback is so rare yet so useful I'm surprised there aren't more people in the business of selling it. The number of people who could use a good business coach, therapist, etc. far exceeds the number of people actually making use of one.
- Udik 11y ago
  > Because it's rarely in someone's self-interest to give honest feedback, which is true for [...] almost anyone in a position to issue some type of denial. Instead, they part with something ambiguous, non-committal, and ideally flattering because it covers their butts and allows them to backpedal if necessary. I broke up with a girl a few hours ago and this sounds so cruelly true.