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Finding Profitable Startup Ideas

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Re: Finding Profitable Startup Ideas

#61

Post by fogzen »

danieltillett wrote: post #60
fogzen wrote: post #58

Earlier quoted context omitted.

That’s my point... the financial system is built to reward the wealthy and does not focus on creating new entrepeneurs. Commercial loans aren’t provided for startups. Only the SBA engages in that and you have to prove you don’t have personal funds and/or be a minority to get them (I know I’ve tried.)

How do you prove you are a minority?

Really depends on the specific loan program, but in general the majority of owners or employees must be black, Asian, Hispanic, or Native American. Not sure about the process of proving that though. There are loan programs for woman-owned businesses as well.

http://www.mwbe.com/cert/certification.htm

Re: Finding Profitable Startup Ideas

#62

Post by bmelton »

fogzen wrote: post #58
gfodor wrote: post #53

Earlier quoted context omitted.

What you're referring to here are boring old commerical loans. Of course you're never going to get a bank to lend you money unless they can be sure you will repay the principal. If you're throwing money at risky ventures where you may lose your investment entirely it seems reasonable to expect a large amount of upside.

That’s my point... the financial system is built to reward the wealthy and does not focus on creating new entrepeneurs. Commercial loans aren’t provided for startups. Only the SBA engages in that and you have to prove you don’t have personal funds and/or be a minority to get them (I know I’ve tried.)

Not that I'm suggesting you do or don't do this, or that it's right or fair, which usually has some form of 'eligibility' for awarding contracts to business, the usual workaround is to hire a figurehead CEO who is a minority (or disabled war veteran, or whatever other status the government determines worth worth investing in).

I say figurehead because that's usually what they are, but there's nothing to suggest that you couldn't find an eligible co-founder or, to really work the system, find an eligible co-founder who is politically connected in some way.

Re: Finding Profitable Startup Ideas

#63

Post by fogzen »

bmelton wrote: post #62
fogzen wrote: post #58

Earlier quoted context omitted.

That’s my point... the financial system is built to reward the wealthy and does not focus on creating new entrepeneurs. Commercial loans aren’t provided for startups. Only the SBA engages in that and you have to prove you don’t have personal funds and/or be a minority to get them (I know I’ve tried.)

Not that I'm suggesting you do or don't do this, or that it's right or fair, which usually has some form of 'eligibility' for awarding contracts to business, the usual workaround is to hire a figurehead CEO who is a minority (or disabled war veteran, or whatever other status the government determines worth worth investing in). I say figurehead because that's usually what they are, but there's nothing to suggest that…

Thanks. I wasn’t looking for individual advice I just wanted to point out that the major barrier to entrepreneurship is not lack of ideas but a lack of access to capital for new businesses.

Re: Finding Profitable Startup Ideas

#64

Post by comstock »

brucephillips wrote: post #57
comstock wrote: post #56

The last sentence really stuck home to me (edited for clarity): While these Red Ocean ideas may not result in creating multibillion dollar companies they do offer opportunity that can lead to riches and personal autonomy. It’s sad that we live in a world where the goal of personal autonomy is so lofty. We have an over abundance of resources in the West. And yet having the freedom to work on useful things under our ow…

You're underestimating how expensive that goal is. Providing every adult with basic income so that they can pursue their dreams would bankrupt the country.

I’m not really talking about providing a basic income.

What I’m saying is the barrier to having “personal autonomy” in a society where providing the essentials of life has to a high degree already been automated, is too high.

Re: Finding Profitable Startup Ideas

#65

Post by danieltillett »

fogzen wrote: post #61
danieltillett wrote: post #60

Earlier quoted context omitted.

How do you prove you are a minority?

Really depends on the specific loan program, but in general the majority of owners or employees must be black, Asian, Hispanic, or Native American. Not sure about the process of proving that though. There are loan programs for woman-owned businesses as well. http://www.mwbe.com/cert/certification.htm

The black category seems rather open to abuse given everyone on the planet has origins in the black racial groups of Africa.

I wonder if you could use a 23andme type genetic test to "prove" you have x% black or any other minority genetic background?

Re: Finding Profitable Startup Ideas

#66

Post by bmelton »

fogzen wrote: post #63
bmelton wrote: post #62

Earlier quoted context omitted.

Not that I'm suggesting you do or don't do this, or that it's right or fair, which usually has some form of 'eligibility' for awarding contracts to business, the usual workaround is to hire a figurehead CEO who is a minority (or disabled war veteran, or whatever other status the government determines worth worth investing in). I say figurehead because that's usually what they are, but there's nothing to suggest that…

Thanks. I wasn’t looking for individual advice I just wanted to point out that the major barrier to entrepreneurship is not lack of ideas but a lack of access to capital for new businesses.

FWIW, outside of the bay area, it's not nearly so easy to get access to capital anyway. Not trying to throw shade on anyone, but it seems far less likely that "ideas" that have no product, no users, etc. would be funded in the DC/Baltimore VC markets, but seem fairly routine over there.

Bootstrapping seems pretty much the same everywhere. Pare down your living costs, build a true MVP in your spare time, start selling in your even sparer time until you can either show enough traction for a small business loan or hope to catch lightning in a bottle with virality.

It isn't easy, it takes a lot of talent, persistence, and luck, but it isn't impossible, and if you can manage to build something people want, it isn't reserved purely to the capital class. Of course, it will always be easier for them to take the same idea, reach out to their network for capital, hire a team to implement it, and all of that increases their chances for success.

Re: Finding Profitable Startup Ideas

#67

Post by elorant »

lettergram wrote: post #10

It's interesting that of the many friends I have who started companies (10 - 12), only two of them didn't receive funding. Both businesses built from scratch and now have a revenue somewhere in the neighborhood of $1m a year after two years. That's honestly pretty good IMO. The other eight or so friends who started companies accepted some form of money. Of those, only two are still in existance. The survival rate of…

The main reason why bootstrapped companies have a better chance is that they grow more naturally/slowly. Once you take VC money you have to go full steam ahead so the investors can exit in 3-4 years. And in most cases that forces you to take directions you don't want to.

Re: Finding Profitable Startup Ideas

#68

Post by AznHisoka »

throwaway0255 wrote: post #31
enraged_camel wrote: post #27

Earlier quoted context omitted.

I used to think so as well, but over the years, I've realized that execution is the easy part, at least for me. Finding good ideas, as in ideas that can lead to profitable businesses, is difficult because it requires deep domain expertise.

Yeah I used to think so too. Now I just think it's a thing people like to say to emphasize how difficult and important execution is. But execution mattering doesn't mean ideas are easy. Ideas are really, really hard. Good ideas are the result of an extraordinary feat of luck, an extraordinary feat of outworking everyone around you to get very deep domain expertise, or a combination of both.

I’m so glad so many more people are disagreeing with the truism “ideas are cheap”. Everytime people say that, I have to roll my eyes. Like really? execution is hard but easier as its operating within known boundaries and restrictions.

Re: Finding Profitable Startup Ideas

#69

Post by georgiecasey »

eli wrote: post #59
lubujackson wrote: post #37

I have issue with the "Blue/Red Ocean" concept. Google is supposedly a Blue Ocean idea. Really? Sure, their approach was novel but the search market was already saturated by Alta Vista, Lycos, Yahoo, etc. You could say the same about Facebook with the competition of Friendster and MySpace. In both cases they took a new angle that let them expand well beyond the existing market, but the market did exist and was alread…

Nobody else was doing AdWords

which was stolen from bill gross and goto.

google's innovation was a wayyy better mousetrap. i remember the first time using it in 1999, those 10 blue links were like a new, far superior version of the internet

Re: Finding Profitable Startup Ideas

#70

Post by adventured »

pwaai wrote: post #39
lettergram wrote: post #10

It's interesting that of the many friends I have who started companies (10 - 12), only two of them didn't receive funding. Both businesses built from scratch and now have a revenue somewhere in the neighborhood of $1m a year after two years. That's honestly pretty good IMO. The other eight or so friends who started companies accepted some form of money. Of those, only two are still in existance. The survival rate of…

I think startups die because they are pressured to spend a dollar or more for every dollar that comes in. Bootstrapped businesses are forced to retain cash for a rainy day. It is anti-fragile vs the fragile nature of a negative/break even cash flow business that depends on a steady stream of investors who introduce other investors who introduce other investors. It's built on ego and not on fundamentals and humans are…

> These days you can just get a loan from a bank if you have a high enough MRR to cover the interest rate

Heavily depends on the business. Banks absolutely hate to lend to businesses with few or no assets. It's not enough to just be able to cover the payments because of your MRR. The bank wants something to seize if you implode. For the bank it's a simple calculation: how do we get our money back, if your business turns south?

If you're an asset-light Internet company, SaaS, etc., you are not easily getting a bank loan just because you can meet the loan payments. It'll be almost impossible to get a traditional bank loan in fact.

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