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Ideas For Your Next Tech Startup
prostoalex writes "Business 2.0 magazine enumerates tech ideas that venture capitalists are currently interested in, listing the amounts they have ready to invest." From the article:"A column that appeared on Business2.com the next day described the company Armstrong envisioned and his wish list of criteria. Those who thought they had the right stuff could send Armstrong a business plan. A few weeks later, Armstrong had a new gripe: He'd received more than 20 solid plans and couldn't decide which of three finalists he wanted to fund -- not just for $1 million, but for as much as $5 million. He has since winnowed the list down to two.
That got us thinking. Why not ask dozens of VCs a tantalizing (but often unasked) question: What types of ideas would you fund tomorrow if the right pitch landed on your doorstep? After a few weeks of trolling Sand Hill Road and beyond, we got 11 leading venture firms to spill their most promising business ideas -- and to pony up $50 million in funding to the entrepreneurs who can pull them off. "
I'm thinking mp3 player + SMS + ringtones + java
wait, it needs something...
XML!
Alright, I got it, an mp3 player that doubles as a text messaging device. Instead of beeps, it plays ringtones you pick from your mp3 player. Java makes cool games possible. XML makes it seem cool to those who don't realize it just means humans can read the tags I will hide with DRM thus playacting the RIAA thinking people can't pirate ringtones.
I think I'm on to something...
I got an idea that is sure to be a hit.
A news web site, but not just any news site. One that has a witty address and is directed towards technology. It will be a kind of news for nerds, you know... stuff that matters. It is sure to be a hit!
... begin, the next dotcom bubble has.
Seriously, though...
This isn't a new idea. Twenty years ago, I was trying to raise funds to build a recording studio. A friend of mine, studying for his MBA at Harvard brought me a spiral-bound book that listed VC firms categorized by the fields that they were interested in (e.g., biotech, software, hardware, defense, etc.). All of them were way out of my league, but it made for interesting reading, in a "follow the money" sense.
Ten years after that, when I was involved in a dot.com startup, we ended up pitching to some of the VC firms listed in that spiral-bound book (on Wall Street, not Sand Hill Road).
From what I've gathered from the experiences of friends involved with vulture captial funding, it's a last resort, the only option if angel funding, friends and family, and lines of credit don't pan out.
k.
"In spite of everything, I still believe that people are really good at heart." - Anne Frank
For competitive reasons, I don't want to post this with my real name, but this is a real post from a real guy in the SlashDot community. I've been here for a while (id in the 4x,xxx range).
Anyways, I started a company by raising US $500,000 through friends and family. I used to be the CTO of an Internet company and decided to start my own company on the Internet but in a different field. I am a techie and an entrepreneur and definitely a geek. Let's put it this way, even today, I write the majority of the software (though I have other developers too).
The best advice I can give is to watch your cash flow. I was personally horrified by the stories of $200,000 per month burn rates. I actually had a lot of personal wealth (from my last venture) but still ran out of my basement until I needed more space. The US $500,000 lasted us for 2.5 years (not 2.5 months like some companies) after which we raised another $250,000. But we actually had a viable business already with the $500,000 spend. We raised another $250 K to speed up the marketing that we had already proven to know that if we spent X we would get X times 2 back in less than a year. This was based on hard numbers.
Anyways, I only gave away about 25% of the company to do it, and the company is probably worth about $20 million today and our earnings are growing faster each month.
We are in the very competitive website builder arena but are one of the top sites in the field. Our focus has been on ease of use first and then secondly on feature set.
Anyways, I'm mentioning this because I wanted to give those of you who want to start a business hope.
The absolute worst thing you can do is get into the high-tech business without a model for making money. Pure research or cool ideas are fun but don't bring home the bacon. Remember your market is business people so focus your business plan on how the tech brings in profit. Now how cool the tech is and hence there ought to be profit.
Good luck.
I have personally overseen the patenting of at least 75% of these ideas. Considering that's just within my own firm, and without a reviews of the prior art, any firms attempting to implement these concepts will probably be faced with serious legal obstacles.
We have solved step3) ???
Asking VCs the specifics of what they want to invest in is pointless; they don't know. What they do (or should) know is a good idea when they see it.