Idea Foundry: Want to start a company?

July 18th, 2008

Tags: Blog, business

This weekend is Startup Weekend Columbus, a three day skunkworks convention where 150 people walk into a building for a weekend and do their best to get a few companies started. I registered for it a few months ago with the thought that it’d be cool to really dig into something new and shiny for a short amount of time, and have some good fun networking with others. Unfortunately, three things happened that I wasn’t expecting at that time.

First, I didn’t realize is that I would decide a week beforehand that the idea I’ve been kicking around my mind might actually be worth pitching.

Secondly, I wasn’t expecting this idea to be extremely popular- it swept the vote during the first elimination round, and now there’s a bunch of people here who’re interested in making this happen.

The third thing I wasn’t expecting is exactly how far out of my league I feel right now. I’m a developer- a damn good Developer, Sysadmin and Architect. I’m also really good at identifying trends and turning commonly held assumptions upside down. Strategic thinking comes fairly naturally, but writing a Business Plan? Identifying revenue streams? Not exactly my forte.

So, first things first, I’m going to stop referring to this as My Idea (TM) and start referring to it as Our Idea- I’m part of a damn good team from what I can tell, which is the entire reason Startup Weekend exists in the first place. Everyone’s bringing their expertise to the table, and creating a company.

So what will this company do? Well, we want to Crowdsource Startup Capital.

Startup (or Angel) investment has so far been the realm of individuals with enough net worth that this risky pursuit is offset by existing capital investments. Normal people don’t have five, six, or seven digits to drop into a new company, yet many people would be interested in doing so if they could. So… why not take a page out of the book of Barak Obama and Howard Dean, and source startup capital from smaller donors? Open up the field of Angel investing to people able to contribute $100, $200, maybe $500 each, and facilitate crowdsourced investment. Individuals seeking to fund their pitches would list their credentials (via LinkedIn or reference) and their business idea, including any supporting documents and research they may have.

That’s pretty much it. Conceptually extremely simple, with a target market of “everybody who wants to get in on that startup thing”. Once you get under the hood a little you realize there’s a lot of things one has to worry about- SEC regulations, how to handle the money, do you structure yourself as an investment firm/bank/communications business, how do you handle Fraud and so forth. And most of all, what’s the first step in the business plan? This is an industry so heavily regulated that releasing functionality and additional features are dependent on lawyers and accountants rather than developers and project managers, so the first thing we have to do is identify a revenue stream that will get us to the point where we can afford people like that.

In other words, the trick is finding step one, and executing on it by Sunday. What happens after that … well, one thing at a time.