How do I start a tech heavy business?

March 9, 2007 7:33 PM

I have an idea for a tech heavy business that I know is guaranteed to completely put blockbuster/netflix/any other dvd rental place you can think of. But I have no clue how to start a business. so where do I begin?

My idea is really tech heavy. I have no experience with venture capital firms or anything like that.

basically, all I have is a great idea and no clue what to do with it.

what should I do?

posted by tylerfulltilt to work & money (17 comments total)

worse: you will have to deal with movie studios. the mpaa is tough and if this involves any kind of online delivery, you will most likely not be able to get them to license anything beyond the cumbersome drm-laden options already available.
posted by krautland at 7:42 PM on March 9, 2007

I'm not expert in developing ideas,.. so FWIW...

I dont know how getting a patent works..if you think your idea is THAT good.. you'll probably want to either A) get a patent first, or B) consult with a Lawyer (intellectual property rights lawyer ?)

My second piece of advice is to just start asking around. Stop being afraid that someone is going to "steal your idea".

I've got a great idea to build up an interactive city-map website that holds location/information about local businesses, and half the people i talk to (residents) think its great, the other half (city gov and CoC) are interested, but keep rescheduling meetings and putting me off. I think you'll find getting your idea "off the ground" is harder than it looks, and you'll need all the help you can get.
posted by jmnugent at 7:58 PM on March 9, 2007

my idea doesn't involve online delivery at all. My idea is a marriage of the best parts of netflix and in-store rental.
without any sort of mail or online delivery of movies period.

basically, you come in and we burn the movies from a massive server of files onto special discs that become unplayable after a set time period.

I just have no clue who to turn to for help developing the technology
posted by tylerfulltilt at 10:31 PM on March 9, 2007

basically, you come in and we burn the movies from a massive server of files onto special discs that become unplayable after a set time period.

Already been done. Already failed.

Sorry to be the one to tell you.
posted by cowbellemoo at 10:36 PM on March 9, 2007 [1 favorite has favorites]

Ideas are a dime a dozen. Good ideas might go for a buck. Execution goes for at least $99.99, and you already know you don't know how to execute.

First thing I'd do if I were you is some research. I can think of at least two efforts by people who did know how to start a business and develop the technology that tried something conceptually similar to what you are describing in the past 10-15 years. There is a reason you don't know about them, because they've both failed. Why aren't you going to fail.

Second thing, I think you need to consider what is already happening to the market that you think you can disrupt. It isn't standing still. Netflix is offering movie downloads. Amazon is offering movie downloads, Apple is offering movie downloads. The people who make DVDs are trying to get two competing HD formats off the ground, and China will probably throw another into the mix.

I don't think youre idea will fly, which doesn't really matter, because I'm not you, a potential investor, or a potential collaborator, but if you'll take my advice you spend some time researching this space. You might learn something and you might come up with another, better idea. You should also do some research into starting a business. If you are in a larger city with any sort of tech community there might be some sort of "entrepreneur network," go to the open meetings where people deliver pitches and network. Listen to the pitches, listen to the feedback from the audience. Talk to people, find out what they do and what they are looking for.

Good luck!
posted by Good Brain at 10:49 PM on March 9, 2007

The end of my second paragraph should have a question mark:
...because they've both failed. Why aren't you going to fail?
posted by Good Brain at 10:50 PM on March 9, 2007

Your first point-of-call should be the creation of a simple business plan style document. This will allow you to develop and clearly elucidate the idea while having accounted for the necessary research into competitors, technical overhead, etc...

If it still looks promising after this I guess the next thing to do would be to try and pitch it to a VC.
posted by gadha at 2:38 AM on March 10, 2007

I'm a serial entrepreneur and I would highly suggest that you start by writing a business plan. Not just for the purposes of getting investment (if you feel you need it) but it will worse your to really think through your ideas, the competitive landscape, logistics and marketing considerations. Don't rush this. Really think through everything as you're writing it up. If at the end you're still as excited about the concept as you are now, you should have a good framework of actions that need to be taken in order to turn your dream into reality.
posted by tundro at 4:33 AM on March 10, 2007

Ideas are a dime a dozen. Good ideas might go for a buck. Execution goes for at least $99.99

I'd like to see this sprayed onto the side of the Oxford University Business School; it bears repetition. Likewise I have grave misgiving about the back of an envelope pitch you've made but that's not the question you've asked.

The first place to start is to write a business plan. This is hard and will take you forever. Take the time to do it right as it will be the difference between getting taken seriously and being shown the door.

Then you go to your bank and ask for a small business loan which you as a director will have to personally guarantee. No personal assets of your own? No home with substantial equity? Guess what; you're not getting that loan unless you can really sing for your supper. I guarantee this though: your bank will not be making you a small business start-up loan to do research into technology.

Put the thought of venture capitalists out of your head. You've (seemingly) got no track record - why would they take a punt on you anyway? VCs are an option when you've been up and running for 3-5 years and can show a healthy profit with the potential for expansion. Seed funding is more the purview of business angels not VCs; despite the name it;s simply not what VCs do. Besides which VC is, for most businesses, a poor way of raising funds - the value which they can add is almost always less than the equity stake that they take.

Frankly - and I say this meaning no disrespect - this is not a terribly strong idea. The need for bricks and mortar infrastructure is a gigantic overhead and drain on non-existent capital resources. You don't actually have the technology solution which would be required to effect this idea and no clue about licensing content. Trust me when I tell you that the movie studios spend vast sums of money on lawyers negotiating these deals.

I'd chalk this one up as a learning experience and concentrating on incubating the next one.
posted by dmt at 4:46 AM on March 10, 2007 [1 favorite has favorites]

This idea seems pretty terrible. Like others have said, if you do some research, you're going to find out that two companies have already tried this idea and failed.

On the other hand, you've thought of something which two different companies also thought of and were willing to sink millions of dollars into. If you are interested in this kind of stuff, keep going with it. Start learning some of the basic stuff now, while dreaming those big dreams. Then with your next big idea, you'll be ready to go.
posted by claytonius maximus at 7:27 AM on March 10, 2007

dmt is right on the money. It sounds like you're from a technical background, and we're notoriously terribly at business - it's a different mindset. Step one is to change that - spending time learning how to write a good business plan will go a long way, but you'll also need to do a lot of research, reading and talking to people who have successfully launched a business. Business is all about money and people - your "great technology idea" is a surprisingly small part of what will make the company successful.

Once you have some idea about what is necessary to actually execute the plan, to get it financed you'll either need a lot of rich friends and family that believe in your idea, or a very strong business partner with a proven track record to close the deal with banks or VCs. No matter how much you increase your business knowledge in the next few months, you still don't have any track record. Getting financing is like getting a job - if you don't have experience, most people don't care what your resume says you can do.
posted by chundo at 10:24 AM on March 10, 2007

Also, your use of the word "guaranteed" makes me think you don't really understand the market you're going into. Judging from your description of your idea, something similar has been tried before - just maybe not on such a large scale - and as such it is probably not something you can patent. As a result, if it is successful, the Blockbusters of the world will take advantage of their existing retail stores and huge brand recognition advantage and just implement your idea in their stores.

It sounds like the best case scenario would be that you spend millions opening retail stores, building infrastructure and marketing your brand and get a small niche in the market. Then you get noticed by the big boys, and are forced into a price war with low brand recognition. Not a very attractive proposition given all the debt you've just taken on.

Given your relative lack of experience in business, and limited capacity to get funding, I'd propose the following business plan to you: develop the idea and technology on your own, patent what you can (there may be some aspects of the idea that are still patentable), and sell or license the technology to the Blockbusters of the world. And try to glean as much business knowledge as you can from that process.
posted by chundo at 10:44 AM on March 10, 2007

Skip it. Really.

The value of a great idea is nada.

The stuff that actually gets made to happen isn't idea driven, it's hard work driven. And that's why there's so much crap and so little greatness out there: the people who win are the eager beaver driven types who know how to get stuff done and don't really care all that much about ideas.

If you're not a builder (or insanely driven to turn into one), it's not going to happen. The detail work, the stamina, the risk, the aggravation in actually building something is more than you'd ever imagine. It's only accomplished by people totally totally driven not to think of stuff but to build stuff. The builders win, not the thinkers.

If your idea really is great (which is possible but unlikely...the devil's in the execution, and if you sound like you're not an experienced enough executor to anticipate the many impediments), you can't even sell it to someone else to build. Why? Again: the value of a great idea is zero. And the people in that world know that what I've said above is true. It's all about execution.

Your one hope is if you can connect with someone who's an insane and experienced builder of things, catch him at a rare moment of inactivity, and convince him to take on your idea. You will not get paid by him for your idea (because, let me restate once again, he'll know it's ALL in the execution), but you may be able to draw up a partnership where he gets 95%. Why would you only get 5%? Again...it's all about execution.

Believe me, I know. I'm a thinker who became a builder (successful) and, first chance I got, escaped back to being a thinker again. Building is gruesome and painful, which is why it pays so well. And thinking's valueless.
posted by jimmyjimjim at 4:28 PM on March 10, 2007

Thank you for your answer dmt. You're the only that actually gave me helpful advice besides "Don't!"

lol.

Which by the way guys, I'm well aware of the failures of Movieklub and Flexplay. But I'm convinced that the fundamental idea of burning movies that become unplayable as a new form of rental is a sound and profitable idea. It just needs the proper implementation and marketing.

If anyone wants a detailed explanation of why I think my implementation would be a success where those guys failed, I'll be more than happy to give it.

but again, thank you dmt.
posted by tylerfulltilt at 8:05 PM on March 11, 2007

Wow, way rudely to blow off really good advice from an really experienced party....advice which I took pains to make clear just for you, a complete stranger.

Sometimes "don't" is the most helpful advice imaginable.
posted by jimmyjimjim at 10:01 PM on March 12, 2007

Wow, way rudely to blow off really good advice from an really experienced party....advice which I took pains to make clear just for you, a complete stranger.

That could be because judging by the comments, there's several very experienced parties here, and your take on the situation was somewhat inaccurate and unnecessarily harsh.

The value of a great idea is nada.

Wrong. Even leaving aside the fact that tylerfulltilt is apparently hoping to develop this idea into a product himself and not simply sell an abstract idea, this is still wrong. This is why we have patents and a thriving IP industry. A great idea doesn't make a great business, but a great business needs a great idea. Before moving to the more strategic side of things, I was the idea man in several ventures, which netted me a 20-25% stake in each one. If you own the idea, have done the research, and especially if you have the unique combination of technical skills required to pull off the initial implementation, the value of a great idea is far from nada.

tylerfulltilt, don't be discouraged, but make sure you do exhaustive research as suggested above. If the numbers don't add up, it'll still be a great learning experience. Don't take my previous comments too harshly.
posted by chundo at 8:48 AM on March 13, 2007

You have no way of ascertaining the relative experience levels of those posting to this thread. You certainly don't know mine.

And anyone taking time out of their day to offer response to a perfect stranger's issues (even if that response is not what they wanted to hear), deserves better than a snarl.

As for "harshness", a blunt posting of "Wrong" is rude bombast. So I'll respond in kind: if you believe the patent system and "thriving IP industry" offer this guy of making even a dime off his idea (even if it IS a good one), you are quite seriously deluded.

There are times when the most compassionate advice is to discourage doomed action. IMO this is one of those times. Your feelings may vary, and the OP's feelings may vary. But this is a forum where people are generous enough to contribute their thoughts, and snarling at others as they do so is highly inappropriate.
posted by jimmyjimjim at 4:46 PM on March 14, 2007