It’s gotten pretty clear to me that if you’re not an engineer, then starting a new Internet startup becomes a difficult venture.
Consider the non-engineers out there with great ideas. You want to start a company but haven’t been able to convince someone that you have a great idea through Powerpoint alone. Everyone wants to see something working so they can wrap their brains around it and see if it is truly viable. But you can’t show them anything. So you go try to build it.
So far it becomes an expensive project…well, in Web 2.0 terms it’s expensive. In normal terms, it probably costs what it should cost. You go find some money, and you pay people what they need to get paid and whatever you build gets built.
But not so in the world of Web 2.0. It turns out that full on products can be built for so much less than normal. Well…less than normal if you are an engineer and program it up yourself. You are programmer, product manager, visionary, business development, designer all rolled up in one. You spend a few months coding at night after your day job and, poof, you have a working web site. The only expenses you may have are your own; nobody else needs to get paid.
For non-engineers, it’s a tough to build a Web 2.0 company without being an engineer, or having one as a partner. You could hire an outsourced engineering firm but that could run your costs up to $30k to $100k per month for many months. You could raise that but you’d need 6-12 months to build something. That would put your angel raise at the very high bounds of what is achievable with a Web 2.0 concept. And you’d have to do it without a working prototype. Makes it that much more difficult as investors know they should see something first and have gotten spoiled by all the other Web 2.0 companies who do come in to present a concept with working prototype in hand.
Best bet: Find an engineer or two and bring them on board with your concept. Without engineers, it’s a long hard road and I’ve already encountered several entrepreneurs who are trying to start something, as well as those who are well along the way. Those who have built something could only get money from friends and family, so having rich friends and family goes a long way. Very few have gotten money from a fund, and those were people who had track records in entrepreneurship, experienced and persuasive in the pitch, and had all the important questions answered.
Second best bet: buy Ruby on Rails for Dummies and start programming.