Sunday, March 8, 2009
I Want to Invest in Your Idea--Mine Sucks
If you have money in the stock market, then most likely you're thinking about other places to invest. If you have any cash, you may be keeping one ear open to innovative ideas in green energy, web technology, or education.
To a twenty-nine year old like myself the idea of launching a start-up glimmers with infinite possibility. I think about those prodigies Larry Page and Sergey Brin who founded Google while they were only in college. An original idea, if properly implemented, could lift me out of these merciless economic times.
I actually have some capital to put toward my idea. My mother died about five years ago and I have money from the inheritance. But that money is disappearing fast; on average $20,000 a month. "It will go back up," my friends reassure me, but I'm getting squirmy and I'm also not entirely convinced by their rosy projections.
If I can find the perfect investment idea, I will do it. If you, dear reader, have any smart investment ideas, please let me know.
I work as a freelance SEO consultant. I serve law firms in my community and also companies and individuals over the Internet. To those comfortable enough using the Internet to find work, there are numerous contract bid sites out there. Whether you're laid off or not making enough money at your job and want an additional stream of income, the following sites can help boost your monthly income:
Odesk.com, Guru.com, Limeexchange.com, Workstir.com, HotGigs.com, FreelanceWritingGigs.com, Elance.com
And that doesn't include all of the specialized job boards out there such as:
Mashable, Craigslist, ProBlogger, SimplyHired, CodeGuru . . .
Based on my success from using these sites, specifically Elance.com, I started to think that my best investment would be a similar venture. Elance.com makes 6-7% on every transaction through their site. If there are 10,000 online users per year with the average job costing $1000, at a 6% transaction fee, the site's revenue equals $600,000. Now these are rough figures, but you get the point. There is money to be made in a contract bid site, especially during a recession.
Early on, however, there were some errors in my judgment. First of all, Elance.com has been around since the early nineties. And the other bid contract sites have glutted the market since then. Just to have a contract bid site does not guarantee revenue. It was recently explained to me that building a website is like putting up a gas station in the middle of the desert. The difficulty is not putting it up; the difficulty is building the six-lane highway to get people there.
So how much would this cost me? If the website cost me $15,000 to build, I would have to spend about 3 times as much on marketing. Furthermore, simply creating a contract bid site would not be enough. As I've already pointed out, there are plenty of these types of sites. My site would have to be unique--a purple cow amid the herd--and it would have to offer something new. So I went back to the drawing board and brainstormed what features might draw unique traffic to my site.
Contract Bid Site start-up idea: Create a Dream Team for Web Development
I want to harness the power of social technology on a contract bid site geared toward web developers. I would like to create a site based on three skill sets:
Content (Web Content, SEO press release, bloggers, writers, editors, etc.)
Design (Web designers, illustrators, graphic designers, etc.)
Promotion (SEO, SEM, Internet advertising)
Users opt for a single freelancer in any category or to build a team. The community would also offer advice on bid projects.
The site would sell the idea: Build your own web team. It would create a social environment for outsourcing and idea generation.
Core objective: Team-building advantage and cross fertilization of ideas:
A) building a team to do a project and B) managing that team
The site is less focused on the individual and more focused on the team.
I want the site to be a cross between a social network and an online workplace. Right now Elance.com has a system where buyers can hook up with providers and there are plenty of applications for them to use together. I would like to expand the online workplace to include and facilitate:
Buyer to buyer conversation
Provider to provider conversation
Conversation between teams and individuals
I would like to mimic the actual workplace using a) incentives for outstanding work b) competition between teams and individuals c) collaboration between teams and individuals while at the same time serving as a legitimate site for buyers to contract providers.
Think in terms of tools: I would need a mash-up of tools from two different types of sites, a contract bid site and a project management site. Some examples of project management sites include Microsoft Office Live, BaseCampHQ, Wiggio, Google Docs.
I am merging the tools of a bidding site and a collaborative project management site. The team aspect is emphasized. What are the most cost-effective, highly useful tools to people in three skill sets: Web Content, Web Design, and Web Promotion? What collaborative tools can you offer for building a team and managing a team?
Secondary objective: Knowledge community advantage
The site is a way for users to differentiate themselves from others. They could show that they know more than other bidders, that they are a better match for an investor's project, or that they understand an investor's vision. For example, the site could be an initial "free resource" which hooks first time visitors. If the provider has the knowledge/ideas an investor is looking for, then the buyer would be more likely to go with them.
Before a project begins, there could be group-brainstorming through forums or a private message board. Potential providers brainstorm with the buyer for his or her project. The provider who shows the most initiative and the most insight wins the prize.
In addition, the site would organize people by specialty, helping to connect people with similar skills. For example, programmers who know Asp.net or Joomla. We would organize their profiles with tags.
My next step was finding a web development company to translate my idea into a reality. In the spirit of the project, I decided to post my job description on Elance and Odesk for between $10,000 and $25,000.
I received a flood of responses. In the next two days, I frantically reviewed the pre-bids and locked myself in a conference room at a university library where I spoke to web developers from around the world.
While the prospects of creating a start-up company were exciting, I started to wonder whether this was a quixotic dream. I was talking to sales reps in India who were telling me they had to discuss my requirements with their team of developers before they could write up a proposal for me. What were my requirements? I told them everything I knew. The whole project was so vague that the bidders themselves didn't want to commit to a price. I had the idea, the impetus, the motivation, but I didn't have the architecture. I didn't know exactly what I wanted--other than to create a revenue-generating website.
Without a clear objective, my site would be doomed to failure. Without documentation of user flows, technographic profiles, and specific technology requirements, this idea was a pie in the sky. And talking to the off-shore web development teams, I started to sense my own anxiety toward going forward with the project. They wanted to write detailed proposals, but could I really expect a team in India to reproduce an idea in my head?
And then, in the eleventh hour, I got a call from a gentleman who called himself a "project manager and not a sales guy." I was relieved to hear that his company was located in the US. I shared with him some of my concerns about the project, that it was too large and too expensive. I was giving up, I said.
But he told me that his company was different. They had already created the technology that I needed built. They developed a piece of software for project management. First he gave me a perfect litany of qualifications. His company was one of the top providers on Elance, earning over $200,000. He talked about the scale of projects his company took on and their successes in generating traffic.
We talked for two hours. Not only did he think he could do my project for under $30,000, but he also thought the site was a brilliant idea and was excited to begin work right away. My heart fluttered. I couldn't believe I'd actually found someone to launch my start-up. It would save me hundreds of thousands of dollars. We ended the conversation with him agreeing to write a proposal for the board of trustees. We would communicate again on Monday. It was Friday night.
I was so happy that I closed my computer and curled up in bed with my head on the pillow. I yearned for rest. The last week of interviewing bidders and reading proposals had exhausted me. I was just so glad to have found the right team for the job.
But I couldn't fall asleep for some reason. I lay in bed thinking about the gentleman who practically seduced me with his high-tech wizardry-talk. I jumped out of my bed and turned on my laptop. I looked up his company's profile on Elance. It was true what he said about the high earnings, but written feedback was largely missing. I would think that if someone paid his company to do a job for over $10,000, they would take the time to write some feedback.
Then I tried to go to his company website, but nothing came up. I typed in the name of the company in Google and found this on Rip-Off Report, a website that announces scams to the public.
This floating cyber-fragment shocked me into reality. Immediately, I went to the private message board on Elance and asked the man to account for what I'd found.
He denied the charge, saying that "The Rip-Off Report" was a scam.
But it didn't matter anymore. Whether this guy was a reliable web developer or the Talented Mr. Ripely, I wasn't going to hand over 30 grand to him for a bid project. The whole delirious experience deflated my enthusiasm. After all, if I couldn't trust the providers on Elance, did I really want to create a contract bid site of my own?
After this ordeal, I'm thinking I would still like to create a site. I want to invest in a good idea. I'm just not sure if my idea qualifies as good anymore. Tell me what you think. And if you have an investor idea yourself, let's hear it.
ARTWORK BY CODY HOYT
Posted by Blog of Innocence at 11:13 AM
Labels: bid project, contract bid site, investment ideas, investor ideas