I've got 20K to develop an idea into a business. Where do I begin?
January 24, 2011 6:21 PM   Subscribe

I've got software engineering expertise and a solid understanding of business fundamentals. I'm looking to drive the project & team(s) - not build the idea myself (assuming its software-based). Any thoughts on how to find the best idea and wisely invest these funds?
posted by joshuamcginnis to Computers & Internet (6 answers total) 3 users marked this as a favorite
How fortunate! It just so happens I have an idea you can invest in for $20k.


Why not get together with some awesome friends and just say 'hey, if we can think of a kickass idea ive got 20 grand to make it happen. who's in?'
posted by ian1977 at 6:41 PM on January 24, 2011

Honestly, $20K doesn't sound like much money to do anything significant software-wise at all. That's a thousand man-hours at only $20 per hour. Never mind the possibility probability of the intersection of "wise investment" and "first time driving a project" being the null set.

If you insist, maybe a good smartphone app would fit the scale of your investment and have a shot at recovering its costs.
posted by axiom at 7:37 PM on January 24, 2011

If you want to invest in software with $20k, buy stock.

You really can't do anything with $20k. You can't hire people. Who's going to come work for you when they know you've only enough money to pay a single person's salary for 3 months? You can't even supply them with an office, or equipment, or expense accounts. Startups aren't going to come looking to you because they're looking for 7 figure sums. You aren't worth their time. A friend of mine runs a software startup out of San Francisco, and the way they were able to get anything done was by having the two founders work on their own time and money until they had something interesting enough to show off, and then they took it to investors and secured $6,000,000 in funding. Now they have a team of about 8 people, because people will come work for you if they know you will actually be able to pay their salaries even if you're not profitable within 3 months, because you almost certainly won't be.

The only thing you can really do with $20k is live off of it for a few months while you write your own software and then hope someone wants to buy it or invest a lot more in it.
posted by tylerkaraszewski at 10:44 PM on January 24, 2011

Response by poster: @tylerkaraszewski i disagree. i work heavily with external independent contractors who are very capable of executing the work within budget. $20K is enough to build a working demo of a lot of business ideas.
posted by joshuamcginnis at 5:50 AM on January 25, 2011

You could network in online project communities or realworld ones like Barcamps and see what ideas people are working on.
posted by JJ86 at 7:22 AM on January 25, 2011

While $20K might turn an idea into a demo, its unlikely to turn it into a shippable product. If the aim of the demo is to raise more money to turn the demo into a product, then its important to realize that the demo is not what is being invested in. The team that built the demo is what is being invested in. You don't have a team if your demo was created by external consultants.

The right way to think about this, is that the $20K will pay your own bills while you work full time on your start-up idea. It's not really enough to engage anyone else to work on it for you. At the beginning you all support yourselves and work for stock. The value you bring to the start-up is not $20K, that's mice nuts, it's your own professional abilities and sweat equity.

If you want to find good ideas to invest your time, money and energy in, then the best thing is to start networking with other entrepreneurs. I don't know where you're located, but there are dozens of events every month in Silicon Valley where folks meet-up to network for this very reason.
posted by Long Way To Go at 7:01 PM on January 25, 2011

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