Michaelochurch, I've read a bunch of your blog posts concerning alternatives to VC funded startups and I have a question for you. Why raise any funding at all? Instead why not save a year or so's living expenses, pick a niche market, do contracting in that area and then try to OpenSource and productize a common problem that a bunch of your clients have. This approach is very similar to what 37 signals does and seems to work for some of my friends.

http://37signals.com/about

Software Engineering, done this way, does not require a lot of capital. What are your thoughts on this model?