Can't win for losing

By Zvi Grauer on October 15, 2008
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Ever wonder if it is possible to start an innovative web business without either programming skills or deep pockets? Here is a recent email exchange that demonstrates the problem we face. I edited the text for brevity, clarity, identities and intellectual property protection. Hopefully, the message still comes through clearly.T. I hear you are looking for help on a project. ZG: I want to create a location based social networking site. Think WAYN.com without the bloat. The team will share any income from the site, but it is an exciting project, even without the money. T: Social networks require investing a LOT of money (at least $ 7 figures). My employees are not going to receive knowledge as payment. ZG: I disagree about the cost. I want a simple tool for users to share their locations, just a few PHP pages and MySQL tables for starters. Maybe a student or a programmer with time on his hands can help.T: We can post on the faculty monthly, but I don't think it'll work. PHP and MySQL are not early courses, and even in advanced studies are not covered enough.ZG: Heck, even I can write PHP code that can read and write from MySQL database. It can not be that hard for a programmer trained in C or Java and SQL basics.T: No, that's not so simple. A partial project is closer to nothing than to something. This is a medium project needing at least 4 experienced programmers, full time, one month, for a 70% prototype. Launching the site will need a paid clicks campaign, $10 000 minimum, just to measure results. And the project has to be designed, developed, launched and marketed in less than a year - otherwise it will be copied by anyone with the right resources and the whole effort will go to waste.ZG: What you say makes sense. I think if we want to put so much into this site, we should write a business plan, and try to get seed money. Of course, now this is a business, not a hobby site any more.

So there it is. Globalization, the fast product life cycle, and the low barrier to entry combine to work against you. A good idea without financial backing can be easily copied (embraced) and extended, using relatively cheap labor (outsourced programming) around the globe, and relatively (for an established business or one supported by a VC) inexepsively blow you out of the water.

Oh well, raisecapital.com, here I come!

My hobby site, of which I am NOT writing here, is www.words2u.net.

Tags: social networking Intel