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The Mark Cuban Stimulus Plan - Open Source Funding

108 points by reitzensteinm 18y ago

Fuca 18y ago
I like this Guy good will to always come up with win-win situations all the time with sincerity and open mind. Just wonder why would be the reason for rule #2: He will not put his money on any business getting revenue from ads; I do not see Google going bankrupt.
- jraines 18y ago
  Sure, this rule will filter some false positives -- but on the whole it will surely give him a more interesting (and easy to evaluate) set of ideas.
- gcheong 18y ago
  For one thing it will probably drastically reduce the number of applicants. More importantly perhaps, is it will force people to come up with viable ideas for products that get sold directly to the end-user rather than just expanding the number of advertising channels.
- agotterer 18y ago
  Web 2.0 fails because there is no business model. Ad revenue works for some businesses, but for the majority it doesn't (they live of VC funding and hope for an acquisition). There is also little chance that you could attract enough sustainable traffic in 90 days to create a worthwhile revenue stream.
- run4yourlives 18y ago
  An out-lier does not a trend make.
ojbyrne 18y ago
3. It MUST BE CASH FLOW BREAK EVEN within 60 days 4. It must be profitable within 90 days. 5. Funding will be on a monthly basis. If you dont make your numbers, the funding stops If these are true, unless you're completely poverty-stricken, why whould you need Mark Cuban? Perhaps we're talking large scale investments, but the whole emphasis on "sweat equity" suggests not.
- jyothi 18y ago
  To top it, if it is a type of business that can be built in 90 days, I bet before it even gets reviewed, someone else would get it live and for no equity shelled. So much for open source.
  - HeyLaughingBoy 18y ago
    The protection there is investment. If your 90 day to profit business needs a $30k investment and your competition can't raise the cash, then you effectively have no competition. In any case, I think the reason for his posting is just to get people moving. It certainly made me feel pumped up about the idea I got this morning!
- pg 18y ago
  Presumably the same reason many profitable businesses raise outside funding: to grow faster.
  - fauigerzigerk 18y ago
    That's true, but I wonder what I would buy for the money that helps me grow the business faster within 90 days. Employing people is excluded, renting office space is useless in that time frame, so the only things I can imagine are buying rights to something or buying actual physical merchandise. Buying services, i.e outsourcing much of the work, is just a way around the no employees rule. Labour cost is probably the biggest chunk of most growing software startups' cost and that's excluded. My conclusion is that it needs to a be rights based business. Buy rights to something, add value quickly, and resell the results.
    - cstejerean 18y ago
      Where did you get the "no employee" rule? If I understood correctly the whole point of this was to create jobs, but that everyone hired needs to work, not organized into layers of management.
pg 18y ago
Who knows if this concept will work, but it's an intriguing idea. And I like it that in the middle of a supposed depression, the two top links on HN right now are offers of funding for new companies.
- polvi 18y ago
  Would you recommend this as a funding option for any of the YC funded companies?
  - pg 18y ago
    Sure, if the valuation was good enough and the growth targets were reasonable. There's no rule about how detailed the business plan has to be.
  - fallentimes 18y ago
    Cuban didn't return my emails when we launched :(.
    - prakash 18y ago
      He returned my email when I had suggestions for the Mavs a few years back :-)
      - fallentimes 18y ago
        The three-sided shot clock? When I was in college, he returned an email of mine. I asked him if he was any happier now that he could have anything in the world. He told me that he was just as happy when he lived off of happy hour food and lived in a dumpy apartment with his best buds.
- JesseAldridge 18y ago
  Why do you say "supposed depression?" Do you doubt that the economy is in trouble?
  - 18y ago
TomOfTTB 18y ago
Here’s the thing. If you’re a person with a "big idea" that idea means more to you than just something that popped into your head. It’s your hope. It’s what may be your big chance one day. So it's a big deal to you. He’s asking people to basically give up on that dream. Since it would be easy for the idea to be stolen by someone with more resources you basically have to renounce the idea when you reveal it to the world. In return for that sacrifice you might create a company that would, at best, produce a minor positive impact on the economy as a whole. Which is the kicker as far as I’m concerned. No company created like this is going to save the economy. At best you’ll generate around a hundred jobs in an environment that’s shedding hundreds of thousands a month. Meaning even the most altruistic person will have to get over the fact that they won’t be doing all that much good with this. Seen like that I don’t see many people taking him up on this offer.
- fallentimes 18y ago
  But the execution is almost always worth more than the idea. Ideas tend to change a lot once you get started. And of course one thing won't change the economy, but helping to create new businesses is a great thing.
  - TomOfTTB 18y ago
    But that’s sort of my point. Mr Cuban’s rules limit the scope of what you can do. If you have to break even within 60 days than you can’t have that many resources (a 2 person operation at best I would assume). So say you come up with the idea, he funds it, and you get to work with one other person. Now what’s to stop some company who sees your idea (which is probably worth stealing since Mr. Cuban liked it) and puts 6 people on it for the first 2 months. No matter how well you execute it’s hard to beat a team 3 times your size who are working on the same basic idea. Because even if you execute better they can self correct fast enough to kill you off.
    - fallentimes 18y ago
      I sort of see what you're saying, but people's ideas are everywhere and are copied all the time. Also, more people + more money != faster or better execution.
mjnaus 18y ago
I am having somewhat of a hard time figuring out how this "stimulus plan" helps the economy, as it appears it's intended. If a startup is able to reach profitability within three months, this startup surely wouldn't need Mark Cuban's money to move forward and create jobs at some point in the future. They would have a rather big chance at succeeding even without this extra cash. Mark presents this initiative as doing something for the greater good and the economy, however investing in companies that need to be profitable within three months (assuming funding will stop if they don't reach profitability within that time frame) is not exactly a risky investment and looks more like an easy way into something new for Mark.
- agotterer 18y ago
  Really depends what the scope of your project is. I'm a developer, I could build a site for the cost of hosting (and time). If it can make a few bucks a month its "profitable". But you still have a ways until you are generating enough revenue to have a payroll, benefits, an office, etc. No one really knows what the scope of his investment is. Mark is a smart guy, I'm sure this is a testing stage. So, he gives you a few thousand dollars (if that) to "test" for 90 days. If it has potential to make money, who knows where it could go.
- whatusername 18y ago
  the "open source" nature of it perhaps? The fact that these business plans need to be posted in full - means that other places can duplicate them. (also - that's probably the secret - this is probably not a tech play.... Think small local (but replicatable) businesses)
  - alain94040 18y ago
    You nailed it. It's a great local stimulus and it could put a bunch of people back to work, locally. The condition to be sustainable means that he doesn't want to pay your salary for more than a few months, while you open your store. The fact that it's open means every person in every town can open the same store and succeed as well, without directly competing.
jmtame 18y ago
google, youtube, and facebook would never have made it past his litmus tests. you've got 60 days to grow a tree. start watering.
- agotterer 18y ago
  Yea, but besides Google, Facebook and YouTube havent been profitable in 5 years, let alone 90 days. I'm pretty sure that if youtube doesnt come up with a viable business plan in the next year it might not even be worth keeping. Facebook on the other hand has serious revenue potential.
  - david927 18y ago
    > Facebook on the other hand has serious revenue potential if it can survive the recoil from its sudden popularity, and if it can survive the onslaught of competitors. But those are both big if's.
- adbachman 18y ago
  Someone else in the comments (on Cuban's site) said something similar. His response was to the effect of, "I have no interest in investing in those types of businesses. They take time to build. This is about hitting the ground running" [link to comment](http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-plan-open-source-funding/#comment-57960 http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-p...) Sounds pretty straight forward. The three you mention are ad based, he wants no ad based businesses.
pj 18y ago
The United States government should follow his lead. Giving more grants and low interest loans to startups. The startups, the entrepreneurs, the risk takers, the pragmatists, the efficient and rational are what we need right now to pull us out of this mess. Instead the govt is giving all the money to the rich, inefficient, wealthy elite, who lied to get us into this mess in the first place. Give some money to those with vision. How much could we here on this list do with $700 Billion? The banks aren't doing anything with it... We just wasted it...
- xenophanes 18y ago
  The US Government isn't good at things like this. We don't need it expanding into new areas. Let the market handle it.
  - JesseAldridge 18y ago
    "The US Government isn't good at things like this." Why not? Can we make it better?
    - deleted 18y ago
      [deleted]
    - jacoblyles 18y ago
      The knowledge needed to operate successfully in a market is widely dispersed: http://www.econlib.org/library/Essays/hykKnw1.html http://www.econlib.org/library/Essays/hykKnw1.html This problem seems non-fixable. Also, in modern states power is separated from accountability, so rational decisions are not incentivized: http://unqualified-reservations.blogspot.com/2007/07/why-when-and-how-to-abolish-united.html http://unqualified-reservations.blogspot.com/2007/07/why-whe... This is hard to fix, but maybe slightly more possible. In general, these are hard problems.
      - JesseAldridge 18y ago
        The first link seems to be an argument against planned economies. I think pj was suggesting something much more modest - something along the lines of a government run version of YCombinator. It seems to me that a group of experts giving many small grants or loans to a wide variety of startups would be a very good idea. (It seems to be working pretty well for pg et al.)
VonGuard 18y ago
My favorite comment on that blog, by far, is the dude who wants Cuban to fly him out to texas so he can pitch him on his Star Wars Toy sales startup.
- deleted 18y ago
  [deleted]
- josefresco 18y ago
  His name is Kevin Gawthrope and he's on Twitter http://twitter.com/gawthrok http://twitter.com/gawthrok
mynameishere 18y ago
I have an idea. Selling whiskey. Cheap. To Mark Cuban. Profits in 4 minutes.
apstuff 18y ago
I'd rather be bankrupt of money and have the idea than be bankrupt of ideas and have the money. Thank you Mark. But no.
- david927 18y ago
  That's funny, because I submitted a business plan with the idea that 5% of anything is better than 100% of nothing.
patrickg-zill 18y ago
Send me all your business plans! I won't sign an NDA and neither will anyone else... but at least someone will profit from this (not necessarily you however)...
omnivore 18y ago
I think it's just a post he's using to drive traffic and mock people for his own entertainment. I think any serious idea posted in the comments would probably get deleted.
callmeed 18y ago
I submitted one of my (many) ideas. If anyone's interested, here it is: http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-plan-open-source-funding/#comment-58149 http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-p... (feedback more than welcome)
- run4yourlives 18y ago
  If you can get that launched and advertised, you'll win for sure... biggest issue I'd imagine is that the wedding industry is a local one, and you'd need lot's of vendors in the queue for the brides to find things worth their while.
fascinated 18y ago
This is the most arrogant thing I've recently read (though maybe, he is laughing really hard now as many people have bit the bait). Seriously, wow. What is someone's incentive to publicly post a biz plan+idea in a blog comment over there? Apparently, a tiny amount of money and likely no other help from Mark, wow.

108 points by reitzensteinm 18y ago

Fuca 18y ago

I like this Guy good will to always come up with win-win situations all the time with sincerity and open mind. Just wonder why would be the reason for rule #2: He will not put his money on any business getting revenue from ads; I do not see Google going bankrupt.

jraines 18y ago
Sure, this rule will filter some false positives -- but on the whole it will surely give him a more interesting (and easy to evaluate) set of ideas.
gcheong 18y ago
For one thing it will probably drastically reduce the number of applicants. More importantly perhaps, is it will force people to come up with viable ideas for products that get sold directly to the end-user rather than just expanding the number of advertising channels.
agotterer 18y ago
Web 2.0 fails because there is no business model. Ad revenue works for some businesses, but for the majority it doesn't (they live of VC funding and hope for an acquisition). There is also little chance that you could attract enough sustainable traffic in 90 days to create a worthwhile revenue stream.
run4yourlives 18y ago
An out-lier does not a trend make.

ojbyrne 18y ago

3. It MUST BE CASH FLOW BREAK EVEN within 60 days 4. It must be profitable within 90 days. 5. Funding will be on a monthly basis. If you dont make your numbers, the funding stops If these are true, unless you're completely poverty-stricken, why whould you need Mark Cuban? Perhaps we're talking large scale investments, but the whole emphasis on "sweat equity" suggests not.

jyothi 18y ago
To top it, if it is a type of business that can be built in 90 days, I bet before it even gets reviewed, someone else would get it live and for no equity shelled. So much for open source.
- HeyLaughingBoy 18y ago
  The protection there is investment. If your 90 day to profit business needs a $30k investment and your competition can't raise the cash, then you effectively have no competition. In any case, I think the reason for his posting is just to get people moving. It certainly made me feel pumped up about the idea I got this morning!
pg 18y ago
Presumably the same reason many profitable businesses raise outside funding: to grow faster.
- fauigerzigerk 18y ago
  That's true, but I wonder what I would buy for the money that helps me grow the business faster within 90 days. Employing people is excluded, renting office space is useless in that time frame, so the only things I can imagine are buying rights to something or buying actual physical merchandise. Buying services, i.e outsourcing much of the work, is just a way around the no employees rule. Labour cost is probably the biggest chunk of most growing software startups' cost and that's excluded. My conclusion is that it needs to a be rights based business. Buy rights to something, add value quickly, and resell the results.
  - cstejerean 18y ago
    Where did you get the "no employee" rule? If I understood correctly the whole point of this was to create jobs, but that everyone hired needs to work, not organized into layers of management.

pg 18y ago

Who knows if this concept will work, but it's an intriguing idea. And I like it that in the middle of a supposed depression, the two top links on HN right now are offers of funding for new companies.

polvi 18y ago
Would you recommend this as a funding option for any of the YC funded companies?
- pg 18y ago
  Sure, if the valuation was good enough and the growth targets were reasonable. There's no rule about how detailed the business plan has to be.
- fallentimes 18y ago
  Cuban didn't return my emails when we launched :(.
  - prakash 18y ago
    He returned my email when I had suggestions for the Mavs a few years back :-)
    - fallentimes 18y ago
      The three-sided shot clock? When I was in college, he returned an email of mine. I asked him if he was any happier now that he could have anything in the world. He told me that he was just as happy when he lived off of happy hour food and lived in a dumpy apartment with his best buds.
JesseAldridge 18y ago
Why do you say "supposed depression?" Do you doubt that the economy is in trouble?
- 18y ago

TomOfTTB 18y ago

Here’s the thing. If you’re a person with a "big idea" that idea means more to you than just something that popped into your head. It’s your hope. It’s what may be your big chance one day. So it's a big deal to you. He’s asking people to basically give up on that dream. Since it would be easy for the idea to be stolen by someone with more resources you basically have to renounce the idea when you reveal it to the world. In return for that sacrifice you might create a company that would, at best, produce a minor positive impact on the economy as a whole. Which is the kicker as far as I’m concerned. No company created like this is going to save the economy. At best you’ll generate around a hundred jobs in an environment that’s shedding hundreds of thousands a month. Meaning even the most altruistic person will have to get over the fact that they won’t be doing all that much good with this. Seen like that I don’t see many people taking him up on this offer.

fallentimes 18y ago
But the execution is almost always worth more than the idea. Ideas tend to change a lot once you get started. And of course one thing won't change the economy, but helping to create new businesses is a great thing.
- TomOfTTB 18y ago
  But that’s sort of my point. Mr Cuban’s rules limit the scope of what you can do. If you have to break even within 60 days than you can’t have that many resources (a 2 person operation at best I would assume). So say you come up with the idea, he funds it, and you get to work with one other person. Now what’s to stop some company who sees your idea (which is probably worth stealing since Mr. Cuban liked it) and puts 6 people on it for the first 2 months. No matter how well you execute it’s hard to beat a team 3 times your size who are working on the same basic idea. Because even if you execute better they can self correct fast enough to kill you off.
  - fallentimes 18y ago
    I sort of see what you're saying, but people's ideas are everywhere and are copied all the time. Also, more people + more money != faster or better execution.

mjnaus 18y ago

I am having somewhat of a hard time figuring out how this "stimulus plan" helps the economy, as it appears it's intended. If a startup is able to reach profitability within three months, this startup surely wouldn't need Mark Cuban's money to move forward and create jobs at some point in the future. They would have a rather big chance at succeeding even without this extra cash. Mark presents this initiative as doing something for the greater good and the economy, however investing in companies that need to be profitable within three months (assuming funding will stop if they don't reach profitability within that time frame) is not exactly a risky investment and looks more like an easy way into something new for Mark.

agotterer 18y ago
Really depends what the scope of your project is. I'm a developer, I could build a site for the cost of hosting (and time). If it can make a few bucks a month its "profitable". But you still have a ways until you are generating enough revenue to have a payroll, benefits, an office, etc. No one really knows what the scope of his investment is. Mark is a smart guy, I'm sure this is a testing stage. So, he gives you a few thousand dollars (if that) to "test" for 90 days. If it has potential to make money, who knows where it could go.
whatusername 18y ago
the "open source" nature of it perhaps? The fact that these business plans need to be posted in full - means that other places can duplicate them. (also - that's probably the secret - this is probably not a tech play.... Think small local (but replicatable) businesses)
- alain94040 18y ago
  You nailed it. It's a great local stimulus and it could put a bunch of people back to work, locally. The condition to be sustainable means that he doesn't want to pay your salary for more than a few months, while you open your store. The fact that it's open means every person in every town can open the same store and succeed as well, without directly competing.

jmtame 18y ago

google, youtube, and facebook would never have made it past his litmus tests. you've got 60 days to grow a tree. start watering.

agotterer 18y ago
Yea, but besides Google, Facebook and YouTube havent been profitable in 5 years, let alone 90 days. I'm pretty sure that if youtube doesnt come up with a viable business plan in the next year it might not even be worth keeping. Facebook on the other hand has serious revenue potential.
- david927 18y ago
  > Facebook on the other hand has serious revenue potential if it can survive the recoil from its sudden popularity, and if it can survive the onslaught of competitors. But those are both big if's.
adbachman 18y ago
Someone else in the comments (on Cuban's site) said something similar. His response was to the effect of, "I have no interest in investing in those types of businesses. They take time to build. This is about hitting the ground running" [link to comment](http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-plan-open-source-funding/#comment-57960 http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-p...) Sounds pretty straight forward. The three you mention are ad based, he wants no ad based businesses.

pj 18y ago

The United States government should follow his lead. Giving more grants and low interest loans to startups. The startups, the entrepreneurs, the risk takers, the pragmatists, the efficient and rational are what we need right now to pull us out of this mess. Instead the govt is giving all the money to the rich, inefficient, wealthy elite, who lied to get us into this mess in the first place. Give some money to those with vision. How much could we here on this list do with $700 Billion? The banks aren't doing anything with it... We just wasted it...

xenophanes 18y ago
The US Government isn't good at things like this. We don't need it expanding into new areas. Let the market handle it.
- JesseAldridge 18y ago
  "The US Government isn't good at things like this." Why not? Can we make it better?
  - deleted 18y ago
    [deleted]
  - jacoblyles 18y ago
    The knowledge needed to operate successfully in a market is widely dispersed: http://www.econlib.org/library/Essays/hykKnw1.html http://www.econlib.org/library/Essays/hykKnw1.html This problem seems non-fixable. Also, in modern states power is separated from accountability, so rational decisions are not incentivized: http://unqualified-reservations.blogspot.com/2007/07/why-when-and-how-to-abolish-united.html http://unqualified-reservations.blogspot.com/2007/07/why-whe... This is hard to fix, but maybe slightly more possible. In general, these are hard problems.
    - JesseAldridge 18y ago
      The first link seems to be an argument against planned economies. I think pj was suggesting something much more modest - something along the lines of a government run version of YCombinator. It seems to me that a group of experts giving many small grants or loans to a wide variety of startups would be a very good idea. (It seems to be working pretty well for pg et al.)

VonGuard 18y ago

My favorite comment on that blog, by far, is the dude who wants Cuban to fly him out to texas so he can pitch him on his Star Wars Toy sales startup.

deleted 18y ago
[deleted]
josefresco 18y ago
His name is Kevin Gawthrope and he's on Twitter http://twitter.com/gawthrok http://twitter.com/gawthrok

mynameishere 18y ago

I have an idea. Selling whiskey. Cheap. To Mark Cuban. Profits in 4 minutes.

apstuff 18y ago

I'd rather be bankrupt of money and have the idea than be bankrupt of ideas and have the money. Thank you Mark. But no.

david927 18y ago
That's funny, because I submitted a business plan with the idea that 5% of anything is better than 100% of nothing.

patrickg-zill 18y ago

Send me all your business plans! I won't sign an NDA and neither will anyone else... but at least someone will profit from this (not necessarily you however)...

omnivore 18y ago

I think it's just a post he's using to drive traffic and mock people for his own entertainment. I think any serious idea posted in the comments would probably get deleted.

callmeed 18y ago

I submitted one of my (many) ideas. If anyone's interested, here it is: http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-plan-open-source-funding/#comment-58149 http://blogmaverick.com/2009/02/09/the-mark-cuban-stimulus-p... (feedback more than welcome)

run4yourlives 18y ago
If you can get that launched and advertised, you'll win for sure... biggest issue I'd imagine is that the wedding industry is a local one, and you'd need lot's of vendors in the queue for the brides to find things worth their while.

fascinated 18y ago

This is the most arrogant thing I've recently read (though maybe, he is laughing really hard now as many people have bit the bait). Seriously, wow. What is someone's incentive to publicly post a biz plan+idea in a blog comment over there? Apparently, a tiny amount of money and likely no other help from Mark, wow.