4 ms·

The intention is to pay for an idea, validation and first customers (by being an idea from someone that lives/works with the current problem).

jasode 8y ago
I don't think anybody misunderstands your intention. The disagreement is the effectiveness of your proposition. The problem is that your 80/20 deal causes an adverse selection that attracts the lower-quality non-coders that you don't want. If non-technical non-programmers like Evan Spiegel (Snapchat), Brian Chesky (AirBNB), and Steve Jobs (Apple) can hustle to find that 1st angel investor, or 1st VC funding, or 1st paying customer, that means they also have the street smarts to find an alternative solution to your very expensive 80/20 deal. Even after the biz-idea guys hustle to get that 1st customer, they have to continue hustling to get the 2nd, 3rd, and so on customers to grow a viable business -- unless your thesis is that a new startup with 1 customer is enough to "flip" it to an acquirer like Google/Facebook/Microsoft.
- mmastrac 8y ago
  He still has the opportunity to turn down all but the greatest ones (or all of them) so I think that this is a pretty decent way of approaching it.
- esquire_900 8y ago
  I think the quality of the average HN user is pretty high, but obviously this might attract low-quality proposals. Honestly every offer to code someone's idea will (I've been there, and fallen for it more then once), take what "nithin001" posted as example. This isn't the way to find the next Steve Jobs indeed, and that's not what I'm searching for. I'm looking for that consultant that has seen 4 clients wasting 8 hours a week on the same inefficiency. Someone who will get $2k for an idea and a number of phone calls, and a large kickback for sales (s)he makes in his/her direct network. This isn't the way to kickstart a $1bn company :)
  - jasode 8y ago
    >This isn't the way to find the next Steve Jobs indeed, and that's not what I'm searching for. [...] This isn't the way to kickstart a $1bn company I get your clarification now. I think some including me were thrown off by your "Premise 1: Investors/Incubators over-estimate their ability to pick good ideas/startups." In your business opportunities of "consultants who notice a workflow inefficiency but would rather pay 80% to someone else to do the programming work for a new product", that landscape doesn't have "overestimated abilities" of investors. Instead, they don't even look there at all. They need to put more than $2000 to work on a single deal to make their due diligence time worthwhile. For their fund sizes, they're scouting the arena of potential huge $1b businesses. No non-techie founders of that type of business that had any street smarts at all would ever give up 80% equity of a company in exchange for an MVP. By design of your 80% cut, it would only attract desperate losers. That was the "adverse selection" I was talking about. However, now that I've seen your other replies, your deal feels more like paying a "finder's fee" to the consultant for his/her business idea rather than attracting a cofounder that will share the workload of doing multiple years of hard work with you. Nothing wrong with this but I misunderstood earlier what you were trying to accomplish. In this case, maybe tptacek is right and your 80% is too low and you're underpaying yourself.

jasode 8y ago

I don't think anybody misunderstands your intention. The disagreement is the effectiveness of your proposition. The problem is that your 80/20 deal causes an adverse selection that attracts the lower-quality non-coders that you don't want. If non-technical non-programmers like Evan Spiegel (Snapchat), Brian Chesky (AirBNB), and Steve Jobs (Apple) can hustle to find that 1st angel investor, or 1st VC funding, or 1st paying customer, that means they also have the street smarts to find an alternative solution to your very expensive 80/20 deal. Even after the biz-idea guys hustle to get that 1st customer, they have to continue hustling to get the 2nd, 3rd, and so on customers to grow a viable business -- unless your thesis is that a new startup with 1 customer is enough to "flip" it to an acquirer like Google/Facebook/Microsoft.

mmastrac 8y ago
He still has the opportunity to turn down all but the greatest ones (or all of them) so I think that this is a pretty decent way of approaching it.
esquire_900 8y ago
I think the quality of the average HN user is pretty high, but obviously this might attract low-quality proposals. Honestly every offer to code someone's idea will (I've been there, and fallen for it more then once), take what "nithin001" posted as example. This isn't the way to find the next Steve Jobs indeed, and that's not what I'm searching for. I'm looking for that consultant that has seen 4 clients wasting 8 hours a week on the same inefficiency. Someone who will get $2k for an idea and a number of phone calls, and a large kickback for sales (s)he makes in his/her direct network. This isn't the way to kickstart a $1bn company :)
- jasode 8y ago
  >This isn't the way to find the next Steve Jobs indeed, and that's not what I'm searching for. [...] This isn't the way to kickstart a $1bn company I get your clarification now. I think some including me were thrown off by your "Premise 1: Investors/Incubators over-estimate their ability to pick good ideas/startups." In your business opportunities of "consultants who notice a workflow inefficiency but would rather pay 80% to someone else to do the programming work for a new product", that landscape doesn't have "overestimated abilities" of investors. Instead, they don't even look there at all. They need to put more than $2000 to work on a single deal to make their due diligence time worthwhile. For their fund sizes, they're scouting the arena of potential huge $1b businesses. No non-techie founders of that type of business that had any street smarts at all would ever give up 80% equity of a company in exchange for an MVP. By design of your 80% cut, it would only attract desperate losers. That was the "adverse selection" I was talking about. However, now that I've seen your other replies, your deal feels more like paying a "finder's fee" to the consultant for his/her business idea rather than attracting a cofounder that will share the workload of doing multiple years of hard work with you. Nothing wrong with this but I misunderstood earlier what you were trying to accomplish. In this case, maybe tptacek is right and your 80% is too low and you're underpaying yourself.