Be careful with the strategy. It's very hard to refund people when you don't have the money.
A while back, I presold my audience on a SaaS app. I was 100% clear with them that the software didn't exist, but I would be building it with their funding. As early investors, they get a lifetime membership to the software with no recurring fees.
I got roughly 8K to develop the idea. Keep in mind, I'm not a developer. I know a few things ABOUT code but I don't know any actual coding skills.
When my programmer took my money and disappeared... I had to make 8K (I had nothing) to refund these people because I didn't want any legal issues. Ramifications of this:
1) I had a website #10 in google for a LARGE keyword (1m exact searches/month). I was on the first page, and had around 5K visitors a month. After refunding my users/investors I couldn't afford hosting/podcasting/domain/shopping cart services. I was late on a $7 payment and godaddy pulled my website. They requested $100 to 'restore' it. I came up with the cash and got them on the phone, and unfortunately the backup of the site was corrupt. I had lost a years worth of site content.
2) I lost all support from my audience and my brand became a 'bad word' of the industry.
3) I couldn't afford to move into an apartment. I couldn't find any work, and LITERALLY became homeless. I'm still pulling myself out.
Yes, this could have been avoided by choosing a better freelancer or paying him only upon delivery of the finished product. But this ALSO could have been avoided if I didn't take money UP FRONT for a product I didn't have. It's a VERY risky scenario, because you can't guarantee what will happen.
If you plan on doing something like this, I suggest you do it all ON PAPER, via contracts. He's contractually obligated to pay you upon fulfillment of a service or product or software. Better yet, get them to pay for the service, and then claim that it's not going through (but don't worry, you've been having problems with your payment processor lately) and tell them you'll get back to them after addressing the situation. That way... you find out if they would have paid but you don't actually take their money.
When you take money for something you don't have, you take on a lot of risk.. and in some cases it's a very illegal thing to do.
Be careful!
A while back, I presold my audience on a SaaS app. I was 100% clear with them that the software didn't exist, but I would be building it with their funding. As early investors, they get a lifetime membership to the software with no recurring fees.
I got roughly 8K to develop the idea. Keep in mind, I'm not a developer. I know a few things ABOUT code but I don't know any actual coding skills.
When my programmer took my money and disappeared... I had to make 8K (I had nothing) to refund these people because I didn't want any legal issues. Ramifications of this:
1) I had a website #10 in google for a LARGE keyword (1m exact searches/month). I was on the first page, and had around 5K visitors a month. After refunding my users/investors I couldn't afford hosting/podcasting/domain/shopping cart services. I was late on a $7 payment and godaddy pulled my website. They requested $100 to 'restore' it. I came up with the cash and got them on the phone, and unfortunately the backup of the site was corrupt. I had lost a years worth of site content.
2) I lost all support from my audience and my brand became a 'bad word' of the industry.
3) I couldn't afford to move into an apartment. I couldn't find any work, and LITERALLY became homeless. I'm still pulling myself out.
Yes, this could have been avoided by choosing a better freelancer or paying him only upon delivery of the finished product. But this ALSO could have been avoided if I didn't take money UP FRONT for a product I didn't have. It's a VERY risky scenario, because you can't guarantee what will happen.
If you plan on doing something like this, I suggest you do it all ON PAPER, via contracts. He's contractually obligated to pay you upon fulfillment of a service or product or software. Better yet, get them to pay for the service, and then claim that it's not going through (but don't worry, you've been having problems with your payment processor lately) and tell them you'll get back to them after addressing the situation. That way... you find out if they would have paid but you don't actually take their money.
When you take money for something you don't have, you take on a lot of risk.. and in some cases it's a very illegal thing to do.
Be careful!