News for hackers. Stuff that matters.
Re:Ask HN: How to get initial funding for an idea? by muzani on Friday November 22, 2019 @08:50PM (#21611881)
IMO, you should always sell the product before you have it. Prove that people are willing to throw money at it.

There are a few tricks you can try - you can put up a shopping cart that crashes into an 'out of stock' dummy page and then track the number of people adding to cart. You can put up a few real world banners, track how many calls you get, then tell them that the system is down. You can visit people with a powerpoint presentation.

Don't be a tire kicker though. Just do it as if you're going to do it, then move fast to secure it.

Another easy trick is to look at what people have hacked together. Everyone has a competitor. Yours is likely an excel sheet somewhere. The competitor for the first car was the horse. The competitor for combat planes were balloons and zeppelins.

Re:Ask HN: How to get initial funding for an idea? by badrabbit on Saturday November 23, 2019 @12:19AM (#21612622)
I think it really depends on the product, selling goods and online services is easy but having a brick and mortar component is what makes the costs skyrocket. Perhaps I should try things with a low barrier to entry at first.
Re:Ask HN: How to get initial funding for an idea? by muzani on Saturday November 23, 2019 @06:00PM (#21617194)
Sorry, that was not very well phrased. What I mean to say is that startups are about minimizing risk.

A business model canvas helps you highlight what hypotheses you have. You go through them and minimize each one. Often the highest risk hypotheses are regarding costs and income model.

Seed funding is originally about just about getting enough funding to prove all the hypotheses. You can validate food by finding a delivery partner. Fashion can be placed in clothing stores. Film can be started with YouTube. Just a minimum viable product for each.

I'm not sure exactly what sector you're doing, but there's another model you can consider for brick and mortar. The product developer designs something, stockists (logistics/management/mentoring) buy in bulk for about 30% of retail price, agents (sales) buy from stockists for about 70% of the retail price. You end up with a 8x markup but it's a really low capital model because the people at the end of the chain give you the money.

VCs only take super high returns; they are experts at reducing risk and tend to not value something moderate risk. There are VCs for non-tech companies as well; you want a VC who's a pro at reducing risk in your sector.