My problem isn't really with the amount of money he spent or the idea, it's mainly with his conclusions.

"For not a whole lot of money and time you can get something out there and see if it works."

This has been true for some time, and anyone with any technical inclination whatsoever has already figured that out. However, it doesn't mean his other conclusion is true:

"One thing is for sure: no entrepreneur can tell me that he needs $1 million, four programmers, and six months to launch this kind of company."

The reason it was that cheap and took that little manpower to build was because the idea was so simple and fairly derivative. It's basically Digg for rumors. Hey, it might work and a lot of people might use it, but you won't find many ideas that can be built off of a Wordpress installation, even though Pligg would've been a better choice as the linked article states. If your idea amounts to a list of things that people vote on, then yes, it will take very little time to build. There just aren't that many groundbreaking concepts that fit into that mold. I guess it depends what he means by "this kind of company", although there aren't many definitions that would render his conclusion valid. The vast majority of ideas will take a couple of months and a few programmers to put together, although he's right about the $1 million.

Every single idea is derivative. Many successful products are simply about taking something that exists and then changing its focus or its look.

That's what he did, and he did it for bloody cheap. If you read the breakdown of his costs, you will see that the actual programming + site + logo just cost $4500.

Having dealt with code monkeys that need to be micromanaged, I'd much rather pay $4500 and see a finished product than waste my time micromanaging the development of such an application.

Is the idea stupid? No. It's a reasonable idea. It's a niche idea that has some potential if executed right. Did he overpay? No.

The hardest lesson I ever learnt was that it's often times really not worth it to do things yourself. As a hacker, it's tempting to always do things yourself, but realise at every single point in your life that it's time that is your most valuable commodity.

He's not a hacker. If he tried customizing pligg, it would cost him a lot more time than if he just hired people for $4500.

Like I said, I don't have a problem with the idea, but the more derivative your idea is, the more likely it is that off the shelf solutions can be easily tweaked to build your product. Truemors is more derivative than most, so using it as a barometer for how much it takes to launch a startup isn't completely accurate.

"Every single idea is derivative. Many successful products are simply about taking something that exists and then changing its focus or its look."

Yyyyyyes...but understand that Truemors is rather more "derivative" than, say, the iPod or Windows 3.11.