Entrepreneurship – A second attempt – Feedback welcomed

1 points by nassirkhan 10 years ago | 5 comments

I have come to the realization that my current startup's lethragic growth rate will not allow me to afford a living in the bay area. As such, I am presented with a few options: Get a job, or take another shot at starting a company (albeit, working out of a cheaper city). I am heavily leaning toward the latter, but this time I want to take some feedback earlier on from the YC community as I have found the people here to be amongst the most honest and knowledgeable. I would appreciate your critique (as well as pointers) of some of the ideas I am proposing for my next startup. Also, do you think there is a market need/ actual problem to be solved, or am I just forcing the issue?

a] Outsourcing: As I plan to operate out of Africa for a while, I was thinking of a managed outsourcing business where we train and place the smartest candidates on projects ranging from creative services to development. I see a shortage in talent locally and this model could allow companies to augment their talent pool with affordable labour.

b] Similar to A above but a focus on deploying and managing opensource projects such as wordpress, moodle, open ERP etc. Not only would I provide the technical talent, but also the operational labour to perform services like order management, chat management etc

c] Building a tool gamifies social actions (twitter, fb, instagram sharing etc) - with a lotto/random winnings component that creates recurring engagment by players

I would appreciate any feedback.

Regards.

orionblastar 10 years ago |

First off most startups fail because they don't have a working business plan or they don't have a good target market because they developed a niche that has very few people in it. Work on fixing your business plan and find a new market to target your product at.

a) In the USA the software contracting market suffers because everyone has to go through brokers to get a contract. Most brokers don't understand the technology they are placing people for and just read resumes for key words to place people. Software contractors lost their tax status in the 1970s and never got it back, so they pay a lot in taxes. If you ever heard of Joe Stack he flew his plane into the IRS building because he was a software contractor screwed over by brokers that keep part of the money and the IRS that takes a lot of taxes from software contractors. It is because the system is so messed up that some software contractors go without work for long periods of time and some end up homeless as a result. If you are going to make a new Freelancer web site, forget it, most are in favor of the client and the client always goes to the lowest bidder which is usually a foreign worker. There are no freelance websites for favor of the contractors. There is no shortage on talent, just that people with talent need more money to work and clients don't want to pay their rates so they seek to train young people to work for a cheaper labor. It is a corrupt system you are getting into.

b) Where are you going to get the money to pay people to work on open source projects? They don't bring in any revenue and crowdfunding doesn't always work. You'd be better off training people to work on open source projects in part a to gain the talent so they can be marketable and list the project on their resume.

c) It almost sounds like some kind of spam system that uses social networks to target gamers and then pays off some random lottery.

I don't really see a, b, and c working out.

I myself have been trying to write ebooks, but I recently found out I earn more money via Adsense on Youtube videos. Have you tried making Youtube videos on training people to program or something and put Adsense on it and see how much money it earns?

You really need better product ideas, like look for problems that need solving and see what market is looking for a solution and make a solution or hire people to make a solution and then market it at those people using advertising on places they visit on the Internet.

nassirkhan 10 years ago | |

Thanks for taking the time to reply. I might have to disagree on majority of the points you brought up but I appreciate the point of view.

For b], the emphasis is on helping SMEs deploy solutions that are opensource for their current operations, and provide them with ap-ops, tech-ops and general ops labor. I am not thinking of building out new opensource inititatives.

For c] you are completely off point. We are not targeting gamer sor creating a spam system, rather, I would be trying to create a system for lead capture and CCA optimization.

thanks though

orionblastar 10 years ago | | |

b) SMEs don't always have the budget and usually purchase COTS Commercial off The Shelf products like Microsoft Office and build things on Excel and Sharepoint and other apps. I learned this the hard way trying to target SME law firms for legal practice management software. You'd have to convince them that using open source products and paying your company to manage and develop them for them is the better deal even if it does cost them more money in the long run. You'd also have to convince them that your company can do it better than their own people using the same free open source projects.

c) Lead capture still requires getting the link to your lead capture page out there. If you are posting it to social networks, some might see it as spam.

kjksf 10 years ago |

Not a lawyer, but c) is almost certainly illegal. Gambling of any kind is heavily regulated and restricted.

As to a) or b): it's not impossible to run a consulting company, but then you'll end up running a consulting company, competing with all other consulting companies. Competing on cost alone is not a good idea.

nassirkhan 10 years ago | |

thanks for the reply.

c] is not illegal because there is no wagering involved