3 ms·

You're also ignoring the probability of success. This project is only worth $shitton ($30 million) if the project were perfectly executed and other market part

You're also ignoring the probability of success. This project is only worth $shitton ($30 million) if the project were perfectly executed and other market participants didn't dynamically react to this new entrant. This isn't the likely outcome. The expected value of this project is probably only $5-10 million once you factor probability of success into account and thus not worth the time and effort at trying in the first place. A $5-10 million E.V. project is very much worthwhile for two founders who wanted to bootstrap though! One reason VCs target billion dollar ideas is that you'll probably fail. But in the unlikely scenario that you succeed, it more than makes up for the 10-20 other projects in their portfolio that DID fail.

thorwasdfasdf 7y ago
You won't even make 1 penny, if you can't break even on your user acquisition costs. That's what usually breaks a business not the fact that it's not profitable enough, but that's it not profitable at all.
- shiftpgdn 7y ago
  But music lessons are an ongoing (hopefully) expense. If your pockets are deep enough you can run out all the other players and capture the market.
  - tacon 7y ago
    The lessons are an ongoing expense, but the principals will rather quickly eliminate the middle man marketplace after meeting and being happy with the connection.
    - patmorgan23 7y ago
      Unless you can provide other useful services to help the teacher to manage thier students. Maybe scheduling, accounting, payments.
      - kristianc 7y ago
        In that case it seems a lot easier to skip building a marketplace and just create booking software for music teachers. Though you'd probably find that most were happy with Google Calendar, Xero and PayPal / Square.
      - jacobedawson 7y ago
        ^ Exactly - this where 'commoditizing your complement' comes into play: https://www.gwern.net/Complement https://www.gwern.net/Complement
- samcheng 7y ago
  As your niche gets smaller, you will be able to focus your marketing a bit better. This should result in lower user acquisition costs.
bcrosby95 7y ago
That said, if you want to specialize in $shitton projects you should be picking ones that don't need to be perfectly executed. There's a literal shitton of $shitton projects out there that you can half ass and still make a $shitton from. In my experience the best method at finding these $shitton projects is throwing shit on a wall and seeing what sticks.

thorwasdfasdf 7y ago

You won't even make 1 penny, if you can't break even on your user acquisition costs. That's what usually breaks a business not the fact that it's not profitable enough, but that's it not profitable at all.

shiftpgdn 7y ago
But music lessons are an ongoing (hopefully) expense. If your pockets are deep enough you can run out all the other players and capture the market.
- tacon 7y ago
  The lessons are an ongoing expense, but the principals will rather quickly eliminate the middle man marketplace after meeting and being happy with the connection.
  - patmorgan23 7y ago
    Unless you can provide other useful services to help the teacher to manage thier students. Maybe scheduling, accounting, payments.
    - kristianc 7y ago
      In that case it seems a lot easier to skip building a marketplace and just create booking software for music teachers. Though you'd probably find that most were happy with Google Calendar, Xero and PayPal / Square.
    - jacobedawson 7y ago
      ^ Exactly - this where 'commoditizing your complement' comes into play: https://www.gwern.net/Complement https://www.gwern.net/Complement
samcheng 7y ago
As your niche gets smaller, you will be able to focus your marketing a bit better. This should result in lower user acquisition costs.

bcrosby95 7y ago

That said, if you want to specialize in $shitton projects you should be picking ones that don't need to be perfectly executed. There's a literal shitton of $shitton projects out there that you can half ass and still make a $shitton from. In my experience the best method at finding these $shitton projects is throwing shit on a wall and seeing what sticks.