
Don Dodge on The Next Big Thing: Four tests for if you have a good startup idea - atularora
http://dondodge.typepad.com/the_next_big_thing/2011/05/four-tests-for-if-you-have-a-good-startup-idea.html
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ddodge
This is basic stuff for anyone here. I'm sure you get asked for startup advice
all the time. Here is something you can send to people who ask you for help.
It will get them started thinking...and come back with more focused questions.

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NY_USA_Hacker
Mostly nonsense.

Dodge is wallowing in waste, and from that 'context' what he is saying sounds
okay.

But the truth is different:

First, the most important thing to have in business is good luck. Since we can
do little or nothing to control that, let's set it aside in favor of things we
can control.

Second is the 'idea'. If lots of other people can have the idea and execute
it, then the business promises to have too much competition. Indeed, there may
be established competitors now difficult to start against. So, setting luck
aside, the 'idea' has to be one very few people can understand and execute.

So, entrepreneur Joe has such an idea. Then Joe is about one in one million.
Now how will Joe do on Dodge's points?

Will Joe be able to get others 'excited' about his idea that only Joe
understands? If they are as well qualified as Joe in Joe's specialty, maybe,
but we already know that Joe is one in a million. So, initially, likely Joe
will have to proceed alone.

Will Joe be able to get VCs excited about his idea? Not a chance! In
information technology, one could count on one hand all the venture partners
in the country able to evaluate an idea from a guy as rare as Joe.

So, continuing with Dodge's points, suppose Joe gets users, customers,
revenue, earnings, all growing rapidly, that is, gets 'traction'. Then what?
Sure, then Joe will be able to attract 'co-founders' and 'investors'. But then
the question will be, "Just why would Joe want to do that?".

That is, with Dodge's criteria, for a good project like Joe's, by the time co-
founders and investors are interested, Joe will no longer need them.

This is an old story that goes back to the Mother Goose story 'The Little Red
Hen': She found a seed. From others she got only laughs. She attracted no co-
founders or investors. She plowed, planted, cultivated, harvested, threshed,
and ground the seed to make flour. She built a bakery. She mixed the flour to
make bread dough. She let the dough rise and baked it into fresh, fragrant
loaves of bread. Now she had customers, revenue, and earnings. Also now, and
ONLY now, did she have co-founders and investors but needed neither of them.

But aren't co-founders and investors nearly always needed? Let's see: Let's
start in the East in the US and take a survey of businesses, move to the west,
and end up on the West Coast. Our survey will be in villages, towns, and
cities. We will see some millions of businesses in auto repair, auto body
repair, Web site design, grass mowing, roofing, kitchen remodeling, HVAC,
dentistry, pizza carry-out, 'Diners, Drive-ins, and Dives', commercial and
residential rental property, big truck-little truck businesses, etc. A huge
fraction of these businesses are Sub-chapter S sole proprietorships and have
no co-founders or investors. And at all the larger bodies of water, a huge
fraction of the yachts are owned by such people.

The advantage of Joe? With a one in a million good idea in information
technology, with the advantages of Moore's law, the Internet, and
infrastructure software and the ability to execute that idea successfully, Joe
just has some advantages over the guy with pizza shops, etc. Heck, a good
commercial lawn mower now costs much more than a good server computer. It
costs much more to start a carry-out pizza shop than a Web site serving 100
ads a second.

Joe is the guy to pay attention to. Dodge's advice is not for Joe and is for
people not able to be Joe. To heck with Dodge.

