Development startup mechanism...?

[ilik]

i see business plans in fields of service and trade; but seldom you will find somebody trying to create something, -not just buy in one place and sell in the other. so i wonder how this happens in real life. let's say you have studied the market and there is a shortage on some device... for reference an electric meat cutting device (i know there's lot of them but i take it for reference). and to build one you need minimum 1 electronics engineer because it is related to electricity. 1 mechanical engineer which knows how to develop housing and setting all the mechanical parts. and 1 marketing specialist who knows how to present it to the market. let's add more 1 specialist in electronics because you may not find a universal all in one man who knows everything. a single specialist may know how to transform electricity well, but not know how to develop an onboard processor and communicate to the touchscreen.so you need one more guy who specializes in that. in short this kind of easy plan grows to ~5 persons. how would you propose your idea to somebody who's about to finance it? -like "hey i'v got an idea i'm planning to do this by these men and i need money for 1 year salaries and to rent space and more money to buy laboratory equipment " ....sounds very foolish. i'm cycling into my head what can i cut down, but even if it goes down to a single specialist. it will sound pretty much the same way -"give me the money and maybe it will work after 1 year". nobody would even listen. so, if there is 0 chance to convince somebody to finance you. -then how the hell should anyone start a business ever????? i'v seen here and there some businessmen offering 5000$ or so to invest in innovative ideas. but inventing and development is very time consuming thing it takes months and months to make it work 5000$ will not be enough for anything. if a single man, spends 90% of he's waking life at work or in the way to/from the work to earn for living, then he has no chance to do it by himself. back in the days people used to cut my word and answer "WORK HARD AND YOU'L HAVE IT! YOU DON'T WANNA WORK WHY DO YOU DEMAND!" -buuulshit, you do will work hard, and have a bread on the plate that is the truth. on top of that add the fact that universities are the scam, and books will never teach you all the secrets and "know how" about how to manufacture a device. one might spend tens of years in experiments to find it by himself. only once on some forum i have offered to create a group of enthusiasts to share knowledge and develop something together and people just attacked me. that i was planning to use everyone around and later throw them or something in short they filled the forum by such comments that any reader would momentarily get convinced that i was the source of evil there. well you might say that it is all impossible but remember how blizzard corporation started? 4 friends locked up in a garage for a year one even borrowed food money from he's grandma 15 000$ and in the end they created a multi million dollar company so... here i get lost. can anyone give me any hint how this possibly could work...? ...because even on a theoretical level all the possible combinations look failed right in the start.

[Pita]

I think you have already answered your own questions. We all know the mythical stories of brilliant inventions being spawned from someone's garage using inspiration, perspiration, and a healthy dose of caffeine. I still believe those can happen. But it does take time, determination, money, imagination and a little luck to make it all work.

I'm in the process right now of developing my own product. It is not a technically difficult product to produce, but still entails being able to adopt a number of skills I have never had to use before. It's part labor of love and part belief that I have a good product that will benefit others. With my business the start-up costs are not great so I am bootstrapping the product, but if I needed complex machinery or technical expertise to develop my product then I would need to find financing to start my production facility. Perhaps if the product takes off I will bring the production in-house to reduce costs.

I'm a huge fan of the stories about men like Carnegie, Vanderbilt, Rockefeller, Ford, or even Tucker, who took ideas and eventually developed them into great products and industries. In most cases they didn't originate the ideas, they simply came up with a better means of production or a better product.

One of the benefits of today is that with the internet and modern distribution systems you can outsource some of the technical aspects of production so you don't necessarily need to have the entire development team locked away in a room for a year to still develop a great product.

I agree with you about the lack of people that actually produce anything anymore. It's a shame that just about everything we consume comes off a boat from China. Walking through a Walmart nowadays makes me ill. I wish the US would make an effort to develop a national industrial policy that would entice companies to return production to our shores. I really think that would solve a lot of the issues we have with a stagnate economy and shrinking middle class. But unfortunately it's not a "cool" topic for a politician to broach.

[ilik]

Pita do you know what makes me mad..? it takes one person's sacrifice in order to succeed. yes maybe our children will be happy but what about us?! breaking an economic slavery is like cheating death. and if you truly look at how much it takes and the effort it demands -and prize that it gives back ...it's simply not worth the torture. your development process will put you through such pain such nerve burning, it will bend your personality make you go through such suffering that it will take away from you an ability to be happy at all. so in the end you might ask for yourself you did so much and what have you got in return..? i have personally seen people in such "success", and they did not had any answer.
but well.. if you are a loner and an unhappy character like me, then what do you have to loose everything that had a spiritual value has been already lost...

as for technical part manufacturing process is not hard at all as you mentioned above, let's say you design shoes you send blueprints (a project) file to the factory and they will receive materials from an e-shop, build it by their own manpower,assemble it and even send it to a retail store so. that's true, this portion of problem is really solved. some factories will even agree to make 10 pieces for beginning so you may have 700$ for manufacture startup and that will be enough. most impact comes while you are in development process who will feed you during that time. that's the problem. another problem is insufficient information. there is always something that you don't know how to make and nobody is willing to teach you, even if you agree to pay for it.
that's why one day i confessed to my boss that he really is one in a million, because he built a company with he's bare hands during extreme poverty. have no idea where he acquired the technology... but he has a talent of creating and even bigger talent of selling. and a passion to mess with something for years and years.

i suggest do not create a specific product for specific market. create something that will satisfy markets in multiple fields. and hit right in a spot where there is a solid shortage of such product, it may seem that everything already has been developed but if you study closely there are many things that needs to be developed and people need it, it's just they don't know it yet :)) and you know what..? don't pay your government anything! because they are a piece of S*it! register your production line in Monaco or similar country which releases you of income taxes entirely. maybe then the stupid government will start shaking their brains instead of shaking their balls all day long.

[Fulcrum]

Or those in the technical trades/services can look around their shop, realize "hey, I've got the equipment already to produce the items I am fixing".


and you know what..? don't pay your government anything! because they are a piece of S*it! register your production line in Monaco or similar country which releases you of income taxes entirely. maybe then the stupid government will start shaking their brains instead of shaking their balls all day long.

Not to get political, but this won't fix the problems that exist. This just shifts a business owner's share of the burden to everyone else. Yes, there is waste, mismanagement and corruption at all levels of government but running away won't solve anything.

[Pita]

I've been an idea guy since I remember. Not someone who has these pie-in-the sky ideas for the perfect mousetrap, but someone who records my ideas, thinks carefully about them over time, researches the means of production, marketing, sales, financing, etc.

Because of my perpetual curiosity I'm also a "box-flipper". If I see a new, cool product I will always flip the box over to see who manufactures it. Then if I'm really curious I do a little digging on the internet about the company, the owners, facilities, etc. I will admit that I've even done it with some of the companies that are represented on this forum.

I think what's lacking today are solid role models of people who actually manufacture goods in the US. I'm a big fan of following the lead of others and drawing inspiration from their stories. It's easy to find bios about Bill Gates, Steve Jobs, Warren Buffet, or any one of many internet titans. But what is difficult is to find stories of people who, like ilik's boss, built a successful company from the ground up. I'm sure there are thousands of examples of guys like him all over the country, but their stories don't make it into the flashy business magazines or onto the podcast of some internet guru.

My box-flipping allows me to build a group of virtual role models. I can sometimes extrapolate how they run their business, how they market their products, who their customers are, etc. based on what I find about them. I use these organizations to model how my organization is run.

Ilik, I'm partway through my 6th decade on this rock, so I'm not fooling myself about the effort this product development process will take, but I'm also pragmatic enough to know that one can never have all the answers. Insufficient information is a constant. From my time in the military we called it the "fog of war". The only thing one can do about it is to try to put together a good plan while mitigating known risks along the way.

As for setting up shop overseas, it's not all roses over their either. I lived in the Netherlands for 9 years and the government intrusion into business is mind-numbing. Also, just because a US company is operating overseas, don't think the IRS will not be coming after it looking for their cut. Ya always gotta pay da man!

[Pita]

When talking to a manufacture I always start with a non-disclosure agreement, which should make them at least consider the legalities of knocking-off my idea.

Probably more importantly, I don't think what I am doing is in their field of business. I work with contract sewing operations. They have large facilities that sew custom products for people like me. Maybe I'm a little too trusting, but I don't believe it's in their core business to steal my idea and run off and do it themselves. If they did then they might as well kiss their other customers goodbye because no one would want to deal with them.