Help for Entrepreneurial Class Project

[kevinsanders]

I am currently in a class where the main assignment is for groups to come up with an idea and go through the process of creating a start up company. Part of the assignment is for the groups to get real world feedback on their ideas to help them refine and better shape their ideas. I am asking anyone on this forum for their input on my group's idea and any feedback, positive or negative to help us complete this project.

Here is our idea:
Basically it is a website that allows entrepreneurs and inventors to get help with their ideas by matching them with engineers who can help them determine the feasibility of their idea and set them on the right track. The hope is to build a community sort of like mosaicHUB.com where people without the resources can make connections with engineers to help them grow their idea.
The second half of our group's idea is once the person is able to acquire the professional advise, they could turn around and use our site to help fund their project. We are interested in the new crowd funding for securities law that has been passed, and we would like people to be able to invest in these projects and get stock in return. Currently the bill is still stuck with the SEC, so we might need to change our thinking on this aspect.

If you have any input on our idea it would be greatly appreciated. Any feedback is welcomed. If you do reply, I ask that you state your background just so I can get a feel from where you are coming from.

Thank you for the help!

[vangogh]

Welcome to the forum Kevin. I'll do my best to help with feedback. I'm going to mostly play devil's advocate and offer thoughts for why this business won't work. My goal is to hopefully point out some things you hadn't thought about so you can start thinking about them.

Background: I'm a freelance web designer/developer, the owner of this forum, and I also do a lot of writing professionally. I've been in business about 10 or 11 years and I work entirely online.

To be honest, I'm not incredibly excited about your idea. For the last few years it seems like everyone is trying to start a business connecting others and building a community that ultimately does all the work. As someone who started a site around a community of people (this forum) I can tell you a community is much harder to build than you might think. For example you want to match entrepreneurs with engineers. Until the engineers are part of the community, there's no reason for the entrepreneurs to join, but until the entrepreneurs are there, there's no reason for the engineers to show up. You're going to need to provide something for at least one of those groups of people to join without requiring the other be present.

You also have to keep in mind there are probably hundreds, even thousands, of other sites trying to do the same thing. In fact there's already a community of people here, some of whom are service providers and some seeking services. I could probably take a weekend or a full week to set up similar technology as you'll need and already be far ahead of you because of the existing community.

I'm not suggesting it's impossible, but do know it's much harder than you think to build a community. We've had a lot of people come through the forum with similar thoughts about building a community site and I don't think any of them have yet built the community to the point where they can make money. Look at sites like Facebook, Twitter, LinkedIn. All started out with no revenue stream until a few years and a few hundred million people were members of the site.

You might want to start by limiting who can join at first. Work with a single city or state or choose specific industries to focus on. Once you get the smaller site going you can expand it to other locations and industries. The idea is that by starting smaller it'll be easier to build the initial community you need. Easier doesn't mean easy, though. The owners of the community usually need to be very active until such a time that the community can take over. Compare how many times I've posted to everyone else here (http://www.small-business-forum.net/members/list/?order=desc&sort=posts&pp=30).

Another thing to consider is that people with ideas are often afraid to share their ideas, especially with the people who turn the ideas into real working products. We see it here all the time with people who ask for advice, but are unwilling to share what their business is about. People shouldn't be afraid to share their ideas, but they often are. You're probably going to need members signing non-disclosure agreements and that might mean it's on you to enforce them. Even if you put the responsibility on the entrepreneurs, some people will likely still blame you for deals that didn't work out as well as they hoped.

I'd be very hesitant to start a business that relies on our government passing the required bills you need. Government moves slow and laws change. Add the crowdsourcing if the time comes where you legally can. Until that time assume it won't be part of your business. You won't be able to count on it happening until after it happens.

Another thought is in my experience sites that sites build around the idea of connecting services wanted and provided often attract low quality at both ends. They tend to attract people looking to pay less and as a result they attract less than the best service providers. I think you have a different idea than the typical site like this, but know that it can be hard to attract the best people to these kind of sites. People who have enough resources to grow their idea, probably don't need you and people who can provide the skill can probably make more elsewhere. Do what you can to identify the people who will find your site valuable and tailor everything to those people. The better you can do this, the better chances you have to succeed.

Since I've been pointing out the negatives, let me close on a positive note. I'm one person with an opinion. You don't have to listen to me. I could be wrong about everything I said. I also think if you believe enough in your idea you can usually find a way to make it work. It might be different than you initially thought, but you can still make it work. Some of my warnings above simply need hard work to overcome them. If you're willing to put in the effort you can overcome things like the time it takes to build a community.

When you get down to it, the only way to know if you can make a business succeed is to try.

Hope something in there helps.

[Paul]

The idea in general is good but everything Vangogh said about those kinds of sites is very true. Most of those sites are pretty low level and commercialized. People trying to sell you stuff and drum up business This is one of the few, maybe the only, forum that actually tries to help without everybody pitching their deals or selling stuff. That’s thanks to Vangogh.

To be successful you would need to somehow get quality members engaged . But most serious entrepreneurs and engineers etc are already connected to their own preferred networks. There are also sites like Guru and some others that help connect professionals and services with entrprenuers and business people for a fee.

You are on track with the equity based crowd funding. It’s been approved in theory but they are still messing around with details. Technically you can do it, but only with accredited investors and the process isn’t much different than the standard process. You still need signed docs and proper disclosures and all that.I’m sure you know it’s the unaccredited investors that you really need for crowdfunding. It might be worthwhile to set up as a project but who knows when you could go live.