IDEA - a low startup cost, high profit web startup as HYIP

Hi everybody,

I would like to throw out the following idea for general discussion. Let's see what people say.

I am a Stanford trained software engineer and also an inventor and wannabe entrepreneur. If you want to familiarize yourself a bit with the way I think, you can read some of the answers I have given on LinkedIn to various questions here http://tinyurl.com/bdt9om . I have actually given around 200 answers, but unfortunately LinkedIn only shows the last 30. Anyway, you can just sort of compare the level of intelligence shown in my writings with what other people are writing out there, and that includes CEOs, directors, consultants and so forth.

Anyway, I have got LOTS of cool business ideas. Some for brick and mortar businesses, like a new sort of airport concession, unique and much more useful to waiting passengers than sale of glossy magazines etc. And many other ideas are for web-based service provider businesses that would charge users FEES IN COLD HARD CASH. And there would be LOTS of users.

E.g. consider web-based online marketplace www.rentacoder.com for offshore freelancers, run by Exhedra Solutions. These guys are making LOTS of money from the service they provide to both outsourcers and freelancers. Well, some of my ideas involve niche markets within the general RentACoder model, and I can implement and market them to these niches much better than RentACoder does. Truth be told, RentACoder is just resting on its laurels nowadays, they are deaf to suggestions even when I write to the CEO with free advice.

Or consider remote education. Right now the so-called "eLearning experts" are clueless morons. Why do you think after 20 years of trying they did not manage to dislodge the existing offline education and training industry, which is also very expensive and inefficient? Because they don't know what they are doing, that's why. The services the eLearning businesses provide are exorbitantly expensive and quality is abhorrent. Their claims to quality education are a butt of jokes.

Anyway, so above I noted several areas in which I have excellent technical and managerial inventions. The technological and the managerial sides go together, the winner is he who implements the right technology and the right working methodology. Consider the founder of McDonalds - he implemented the right method of work, the right way to recruit and train personnel and the right technology to help them get things done efficiently, and that's how he became a billionaire. Yes, and of course I have ideas in other areas too, not just marketplaces and education.

Now, many of these ideas don't need a big investment. For many things maybe $3K-$5K would be more than enough to build a good prototype and start getting cashflow. And maybe even go to VCs for expansion money if needed, though I don't think that would normally be necessary.

The usual way to finance something like this is out of pocket or from the so-called "angels". I don't have enough money in my pocket and the angels usually don't return my calls. They are probably too busy wringing their hands in anguish over poor deal flow amidst bad economy, so they cannot spend a few hours talking to a smart guy with ideas. I am the archetypical financially poor inventor running in circles around potential investors so far without results. BUT, being an inventive guy, I am seeking alternative sources of funding. So, how about this idea:

I understand that people who invest in HYIP usually invest small sums, diversify and are fully cognizant of the chance of loss. Essentially, HYIP gurus operate like a small mutual fund. So, what if I publish one of my web startup ideas as a sort of "HYIP with delayed pay off" and solicit SMALL investments from people willing to take a risk? Not only that, I would invite people to invest not everything simultaneously but in stages ("tranches"), with me raising a certain sum of money several times to achieve different milestones. Obviously people investing on the second stage will be able to examine results of the work from the first.

I don't want to run a Ponzy scheme, so I don't want to pay interest for the first let's say 2 months while I am working on implementation and maybe another month while I am winning customers. But later on, once it all starts to run and make money, I would be able to pay interest to my investors under whatever agreed model. Maybe 6% a month initially (more later, just like with stock dividends), maybe just buy you out at 5 times the investment, maybe something else (whatever we agree on on a public forum). It would all be done very publicly under my personal name and so forth.

But, you understand, there will be no legal promise of any kind. If the company succeeds I will have more than enough money to pay, and if it fails, I will pay nothing and publicly say "sorry, folks, the wheel of fortune turned against both me and you". I guess more traditional HYIP operators say things like that too sometimes, although they might not necessarily be as forthright about this possibility up front as I am being here.

Note that I would be MUCH more transparent than your typical HYIP operator. Like I will say, ok, I am now, on week 2 of my project, spending a thousand dollars building such and such software system. Or paying for such and such ads, SEO etc. I would do my best to provide public proof, on a blog/forum type site of what I am doing. Maybe not publish full source code, but at least the screenshots of it, and architecture docs and stuff like that. Anyway, this we can discuss and come to a public agreement about. Likewise, I would be quite transparent about how many customers I will have and what is the revenue. Well, let's say if it is a marketplace, you can just go count the projects posted. For many ideas level of manifest success will be easy to gauge by inspection.

Ok, so to summarize:

1. I will openly publish a business idea for a web-based business which IMHO has great profit potential. I will write up some explanations for you trying to convince you of this potential profitability. It wouldn't be a classical business plan or anything, but it will be a plain English explanation of why it's a good idea.

2. I will set a budget for the project to be raised (let's say $4000 in 3 stages) and clearly explain what the stages (milestones) are. I will further publish approximate "interest rates offer" and ask for input from potential investors. I cannot do the rate setting as imperiously as the Fed likes to do it on T bonds, so obviously I will take input from potential investors (that's YOU :) ) into account

3. the rate terms will be discussed on the forum, an agreement will be reached and some group of people who will be convinced to invest with me would transfer money to me, e.g. via Paypal, for the first stage of fundraising.

4. I will take the money and begin actively working on the project, regularly publishing some glimpses of the work. What exactly I will publish is also a matter of discussion beforehand. We will agree on this topic, and I will fulfill the promises I make publicly.

5. so I will work on it for several stages and implement the startup. Then it will be launched and hopefully it will start bringing in lots of money - well, initially not so much, but later on MUCH more. Like if I spend $5K building a startup and in 4 months I get 4000 people using its services and paying me $20 per month for it, you do the math. And if it will be more like 20,000 people, even better.

6. with the money I am making from the startup and/or with the money I get from a VC for expansion (it's always easier to get VC money when you have working system and cashflow) I will pay interest or other forms of payback to my investors. I will do it publicly and make it a matter of public record, that I made the payments. How to do this physically I am not quite sure right now, but we can discuss this too

7. if the startup fails totally or ends up generating only miniscule cashflow barely enough to cover operating expenses I will not be able to pay anything. If there will be hope for modifying/reimplementing business model, I might solicit money for that separately, and if not, it will just prove a flop, like any failed HYIP scheme.

Well, ok, so that's the idea. Now, may I please get some input about it? Anybody willing to invest under such terms? If so, how much? And under what conditions?

Cheers,

Michael

IDEA - a low startup cost, high profit web startup as HYIP

Hi everybody,

I would like to throw out the following idea for general discussion. Let's see what people say.

I am a Stanford trained software engineer and also an inventor and wannabe entrepreneur. If you want to familiarize yourself a bit with the way I think, you can read some of the answers I have given on LinkedIn to various questions here http://tinyurl.com/bdt9om . I have actually given around 200 answers, but unfortunately LinkedIn only shows the last 30. Anyway, you can just sort of compare the level of intelligence shown in my writings with what other people are writing out there, and that includes CEOs, directors, consultants and so forth.

Anyway, I have got LOTS of cool business ideas. Some for brick and mortar businesses, like a new sort of airport concession, unique and much more useful to waiting passengers than sale of glossy magazines etc. And many other ideas are for web-based service provider businesses that would charge users FEES IN COLD HARD CASH. And there would be LOTS of users.

E.g. consider web-based online marketplace www.rentacoder.com for offshore freelancers, run by Exhedra Solutions. These guys are making LOTS of money from the service they provide to both outsourcers and freelancers. Well, some of my ideas involve niche markets within the general RentACoder model, and I can implement and market them to these niches much better than RentACoder does. Truth be told, RentACoder is just resting on its laurels nowadays, they are deaf to suggestions even when I write to the CEO with free advice.

Or consider remote education. Right now the so-called "eLearning experts" are clueless morons. Why do you think after 20 years of trying they did not manage to dislodge the existing offline education and training industry, which is also very expensive and inefficient? Because they don't know what they are doing, that's why. The services the eLearning businesses provide are exorbitantly expensive and quality is abhorrent. Their claims to quality education are a butt of jokes.

Anyway, so above I noted several areas in which I have excellent technical and managerial inventions. The technological and the managerial sides go together, the winner is he who implements the right technology and the right working methodology. Consider the founder of McDonalds - he implemented the right method of work, the right way to recruit and train personnel and the right technology to help them get things done efficiently, and that's how he became a billionaire. Yes, and of course I have ideas in other areas too, not just marketplaces and education.

Now, many of these ideas don't need a big investment. For many things maybe $3K-$5K would be more than enough to build a good prototype and start getting cashflow. And maybe even go to VCs for expansion money if needed, though I don't think that would normally be necessary.

The usual way to finance something like this is out of pocket or from the so-called "angels". I don't have enough money in my pocket and the angels usually don't return my calls. They are probably too busy wringing their hands in anguish over poor deal flow amidst bad economy, so they cannot spend a few hours talking to a smart guy with ideas. I am the archetypical financially poor inventor running in circles around potential investors so far without results. BUT, being an inventive guy, I am seeking alternative sources of funding. So, how about this idea:

I understand that people who invest in HYIP usually invest small sums, diversify and are fully cognizant of the chance of loss. Essentially, HYIP gurus operate like a small mutual fund. So, what if I publish one of my web startup ideas as a sort of "HYIP with delayed pay off" and solicit SMALL investments from people willing to take a risk? Not only that, I would invite people to invest not everything simultaneously but in stages ("tranches"), with me raising a certain sum of money several times to achieve different milestones. Obviously people investing on the second stage will be able to examine results of the work from the first.

I don't want to run a Ponzy scheme, so I don't want to pay interest for the first let's say 2 months while I am working on implementation and maybe another month while I am winning customers. But later on, once it all starts to run and make money, I would be able to pay interest to my investors under whatever agreed model. Maybe 6% a month initially (more later, just like with stock dividends), maybe just buy you out at 5 times the investment, maybe something else (whatever we agree on on a public forum). It would all be done very publicly under my personal name and so forth.

But, you understand, there will be no legal promise of any kind. If the company succeeds I will have more than enough money to pay, and if it fails, I will pay nothing and publicly say "sorry, folks, the wheel of fortune turned against both me and you". I guess more traditional HYIP operators say things like that too sometimes, although they might not necessarily be as forthright about this possibility up front as I am being here.

Note that I would be MUCH more transparent than your typical HYIP operator. Like I will say, ok, I am now, on week 2 of my project, spending a thousand dollars building such and such software system. Or paying for such and such ads, SEO etc. I would do my best to provide public proof, on a blog/forum type site of what I am doing. Maybe not publish full source code, but at least the screenshots of it, and architecture docs and stuff like that. Anyway, this we can discuss and come to a public agreement about. Likewise, I would be quite transparent about how many customers I will have and what is the revenue. Well, let's say if it is a marketplace, you can just go count the projects posted. For many ideas level of manifest success will be easy to gauge by inspection.

Ok, so to summarize:

1. I will openly publish a business idea for a web-based business which IMHO has great profit potential. I will write up some explanations for you trying to convince you of this potential profitability. It wouldn't be a classical business plan or anything, but it will be a plain English explanation of why it's a good idea.

2. I will set a budget for the project to be raised (let's say $4000 in 3 stages) and clearly explain what the stages (milestones) are. I will further publish approximate "interest rates offer" and ask for input from potential investors. I cannot do the rate setting as imperiously as the Fed likes to do it on T bonds, so obviously I will take input from potential investors (that's YOU :) ) into account

3. the rate terms will be discussed on the forum, an agreement will be reached and some group of people who will be convinced to invest with me would transfer money to me, e.g. via Paypal, for the first stage of fundraising.

4. I will take the money and begin actively working on the project, regularly publishing some glimpses of the work. What exactly I will publish is also a matter of discussion beforehand. We will agree on this topic, and I will fulfill the promises I make publicly.

5. so I will work on it for several stages and implement the startup. Then it will be launched and hopefully it will start bringing in lots of money - well, initially not so much, but later on MUCH more. Like if I spend $5K building a startup and in 4 months I get 4000 people using its services and paying me $20 per month for it, you do the math. And if it will be more like 20,000 people, even better.

6. with the money I am making from the startup and/or with the money I get from a VC for expansion (it's always easier to get VC money when you have working system and cashflow) I will pay interest or other forms of payback to my investors. I will do it publicly and make it a matter of public record, that I made the payments. How to do this physically I am not quite sure right now, but we can discuss this too

7. if the startup fails totally or ends up generating only miniscule cashflow barely enough to cover operating expenses I will not be able to pay anything. If there will be hope for modifying/reimplementing business model, I might solicit money for that separately, and if not, it will just prove a flop, like any failed HYIP scheme.

Well, ok, so that's the idea. Now, may I please get some input about it? Anybody willing to invest under such terms? If so, how much? And under what conditions?

Cheers,

Michael