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Ask HN: Is an Autonomy Fund a viable business model?

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Re: Ask HN: Is an Autonomy Fund a viable business model?

#21
post #15

It's a nice idea, but focusing of technical excellence for its own sake is dubious according to me. If I were offered to put my own money in that project and get paid in dividends after couple of years (we want long term investors), I would probably refuse, as there is no business plan at all. Whoever has money to invest will focus first on the product, and then on the technical quality. What you want is rather: 1. w…

Very good points. Thanks so much. I welcome disagreement because, without it, my ideas would stay in a raw crappy form. So... here are my thoughts. My end goal is for this to congeal into something like an open-allocation environment, but one that exists across companies to some extent. I feel like if we bring OA to the external market, we'll force the hands of employers who will have to improve conditions if they wa…

I am not sure I get your second paragraph, but it seems to me that you want to build some kind of consulting company owned by top coders. Your offer would be to offer programming services, that only very competent programmers could do. My guess for such services would be: ultra scalable web apps, or creation of DSLs - it has to be something very advanced in order not to compete with the numerous consulting companies that are already existing, most of them doing mediocre stuff.

And I can see this taking off. Obviously not fast because most of your potential customers wouldn't even know yet they need your services, but that should be able to slowly bootstrap. And I suppose once you would have built a strong team and gotten some notoriety, you would be able to bootstrap your technological edge into some concrete product.

Having said that, I still have some doubts, mainly because I think we are in a coding bubble, and the future belongs less to the programmers than to the engineers who will build the new space rockets or the technology to exploit green energies from example, while with the standardization of functional programming and the development of various libraries it will be easy for a non programmer to start creating software components that are currently requiring programmers (IMHO there will be less "pure" programmers and more "X's who can program" as you once said here on HN).

Nevertheless I wish you can succeed with your idea, even though I don't think I'll be able to work in your company as I am not a top programmer.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#22
Michaelochurch, I've read a bunch of your blog posts concerning alternatives to VC funded startups and I have a question for you. Why raise any funding at all? Instead why not save a year or so's living expenses, pick a niche market, do contracting in that area and then try to OpenSource and productize a common problem that a bunch of your clients have. This approach is very similar to what 37 signals does and seems to work for some of my friends.

http://37signals.com/about

Software Engineering, done this way, does not require a lot of capital. What are your thoughts on this model?

Re: Ask HN: Is an Autonomy Fund a viable business model?

#23
post #15

It's a nice idea, but focusing of technical excellence for its own sake is dubious according to me. If I were offered to put my own money in that project and get paid in dividends after couple of years (we want long term investors), I would probably refuse, as there is no business plan at all. Whoever has money to invest will focus first on the product, and then on the technical quality. What you want is rather: 1. w…

If I was putting my own money in a project I'd definitely prefer the top 50% programmers with good organizational and interpersonal skills and concrete business plans over the top 5% developers who might just use their near-market salary to contribute to their favourite open source projects and work on esoteric problems that interest them. (I'd pay more attention to technical ability with "VC-istan" growth expectations and incentive structures)

I have a feeling that organizations part-funded by governments that hire intellectuals on near-market salaries to work on projects that interest them (and do the odd bit of teaching) already exist: they're called universities. I realise the plan here sheds a layer of bureaucracy and gives the productive a slice of potential profits they generate, but I think the comparison is reasonable, and I certainly wouldn't pump money into academia with the expectation of collecting returns on it.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#24

The problem is that most local governments that want a tech hub are either focusing on tech already and will think they don't need this, or are on the other end of the spectrum and simply don't care. The key is to find a city on the cusp of making a serious decision to pursue becoming a tech hub. Google Fiber could be an incentive, or it might make them complacent, who knows? Maybe Provo? You can't really aim too sma…

Getting Austin to sign up for that would be a huge coup. I don't think you'd have any trouble getting great engineers to move out there, given how many strong tech companies are already there. That would be ideal. But I'd also want to talk to other municipalities and see what terms they'd have to offer. It's definitely a job development play. These engineers are going to be founding companies that, if successful, are…

This sort of idea is really interesting to me, and the thought of it happening in Austin is quite tantalizing (I wouldn't have to move!).

I find it pretty hard to function in typical management structures, though I work better with teams/some sort of external visibility (my personal projects tend to gather dust too easily, though I'm working on improving this). The concept of an incubator-like environment for collaborating on ideas without the extreme focus on growth would be a perfect fit for people like me.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#25
post #12

It's an interesting idea, but I don't think local governments have room to pay lots of engineer salaries for no specific reason. Startups are risky and this will smell even riskier since it scans politically as a boondoggle. $125,000 is 5 working-class jobs. I don't see cities directly 'creating' jobs by just paying people to do things. So, maybe don't depend on local governments.

Or, here's an idea (that might be politically explosive, or really cool): the funding is contingent upon teaching local school students (at various grade levels) programming (which is still not part of the curriculum in most public schools)-- a 10-15 hour per week commitment. This does mean that we must select for people willing to teach, but as far as I'm concerned, if you're not a good teacher, you're not a good le…

Let's say that each programmer is responsible for a programming club at a public school. Reasonably the club would meet 3 times a week, and would be 2 hours per session. Homework would be assigned, which would need to be 'graded', so you could easily expect 10 - 15 hours a week for the teaching commitment.

Now, how many students would you be able to handle per mentor? I agree that teaching is part of leadership, but few team leaders have had to teach a 100 people at the same time. Maybe 30 per mentor?

Of course, after a year or two the senior students could help as mentors.

Who would join? Since it's a club, students will expect it to be fun. Granted, there are sports, band, cheerleading, etc where it is accepted that there will be hard work involved. They each have some kind of payoff, like games and concerts. I guess the club would be broken down into coaching and development sessions to teach skills, and then projects to develop them. You would want the projects to be something that the students could show the rest of the school, like a website or toy app. It would need to be small enough to be completed during a semester and could be done with the help of the art or A/V club.

How will a professional programmer feel about all of this? Yes, it is rewarding to teach, but at the same time you would be working with teenagers with varying levels of commitment. You're selecting for a very special type of person now, that is a programmer with vision, leadership skills, and that actually enjoys being around young adults.

I could see this working with small groups: 5 to 10 highly motivated students that already know the basics of programming hacking together apps with the help of a mentor. For those who don't know how to program yet, maybe work with the local colleges to open up programming courses similar to Vocational programs or Post Secondary Education Opportunities to learn the basics and earn college credit while still in high school.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#26
Two thoughts.

(a) It will be hard to get $7 million for an untested investment model like this. It would be easier to start with something more like $150k, like the first YC class.

(b) It's hard to advise people on something you haven't done yourself. If you first started a successful mid-growth company, you'd find it a lot easier to raise money for this plan.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#27

Earlier quoted context omitted.

I don't think Pittsburgh has the funding to do it. You're looking at a budget of ~$450mm. I think the funding, rather than the locale, is the blocker here.

How much money do you think it'll take? I'm thinking single-digit millions per year. First class would be about 28 people. So that's $3.5 million per year. Salary plus tech budget is $125,000. That's half-decent but not great, and by design. I'm looking for entrepreneurs, not salarymen (who'd command $150-250k at the level I'm looking to hire). It's not the extreme low salary of bootstrapping (negative including busi…

But doesn't it cost more than $125k to pay a $125k salary? I've been told that it's about 1:1 if typical benefits are involved. So a $125k salary costs $250k.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#28
post #12

It's an interesting idea, but I don't think local governments have room to pay lots of engineer salaries for no specific reason. Startups are risky and this will smell even riskier since it scans politically as a boondoggle. $125,000 is 5 working-class jobs. I don't see cities directly 'creating' jobs by just paying people to do things. So, maybe don't depend on local governments.

Or, here's an idea (that might be politically explosive, or really cool): the funding is contingent upon teaching local school students (at various grade levels) programming (which is still not part of the curriculum in most public schools)-- a 10-15 hour per week commitment. This does mean that we must select for people willing to teach, but as far as I'm concerned, if you're not a good teacher, you're not a good le…

You might want to look into Startup Chile as a model as close to what you are describing as I can think. Equity free money to build things, with little oversight, and the only stipulation is giving back to the community. This usually happens via public workshops at universities, etc.

It's only 40k USD and only 6 months and the location isn't desirable for westerners to perm relocate and doesn't select for the top 5% of engineers but it's close.

Re: Ask HN: Is an Autonomy Fund a viable business model?

#30

Earlier quoted context omitted.

How much money do you think it'll take? I'm thinking single-digit millions per year. First class would be about 28 people. So that's $3.5 million per year. Salary plus tech budget is $125,000. That's half-decent but not great, and by design. I'm looking for entrepreneurs, not salarymen (who'd command $150-250k at the level I'm looking to hire). It's not the extreme low salary of bootstrapping (negative including busi…

But doesn't it cost more than $125k to pay a $125k salary? I've been told that it's about 1:1 if typical benefits are involved. So a $125k salary costs $250k.

Not sure why you'd think benefits are involved here. And a $125k salary does not cost $250k.
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