Hello,
Recently a semi-successful business owner (young guy like me, has two employees; had up to 30k revenue in one mo, 30% profit; runs an ad business for construction contractors) reached out to me with an ask:
He is non-technical, and he wanted a technology he had in mind (or in his words, "envisioned") to do something in construction business.
He came out to my city, was enthusiastic, etc; and, we spent a day discussing his business idea in person.
After conversations, phone calls, emails; including my market research, he suggested an idea that, well, was already done by multiple software businesses before. Some were selling it for 8k-24k per year, some were selling it for only 90$/mo with lesser functionality. It's an AI product automating a certain knowledge job in an industry which pays 100-140k/year to that job title.
Now. It's a pretty tough software to build. Building it a prototype will take 1mo, and later iterating on it would take 3mo to make good, at least. Because it works with data that is gated.
He suggests raising capital; and in fact we had investor meetings, but all said we're too early.
So my issues are:
1. We are in a competitive industry already. While he has potential customers who - as they told him - would buy his product for 1.5k/mo - I feel like I'll be ripping my customers off when there is an equivalent product that is not worse; and costs as much. The biggest competitor has already raised $30M.
2. Data. The biggest issue is data. E.g. the competitor employs human reviewers to verify the data the software outputs, which of course is fed back into their AI, which means their AI is unbeatable.
3. That's still good money. My income right now is (still, shamefully), window cleaning, and that could be a good opportunity. But then, the engineer part of me knows that those potential clients better buy the competitors product; even if I try, the product won't be good in months. And do I want to spend a year of my life repeating somebody's product?
4. I'm currently doing a R&D project which might translate into raising a seed round. Won't do it solo, but I've been working on it (one of my old AI projects; now being developed to be much more proper as 1. I've gotten more capable and 2. Some critical for my project software become more capable). I've spent the entire February working on it.
And I don't know. Redoing others work to a T seems stupid in software; and also I'll spend a bunch of time working on it, again. It feels as if a good (but short-term!) risk/benefit ratio, but then... is that a year well-spent?
And I'm in doubts.
I'm actively trying to find a software job, of course; now I can build it well. But I don't want to switch projects yet again (would it be, what, 5th project in 6 month)? And the time sunk also is scary.
My thoughts are moving into a No, but I know this can pay bills, even though we both underserve a customer compared to competition and I'll compete (though in a sizeable) market.
Also, this is an exitable venture.
But, if I'll to raise capital (which I might) and build complex software, why not stick with the R&D project, which might pay off very handsomely either way?
I'm in doubts. I doubt I should ask anyone about this, but nevertheless.
---
To clarify, 1 sale will take a month to get to. Maybe a 1.5k/mo sale, but I'm not sure.
Recently a semi-successful business owner (young guy like me, has two employees; had up to 30k revenue in one mo, 30% profit; runs an ad business for construction contractors) reached out to me with an ask:
He is non-technical, and he wanted a technology he had in mind (or in his words, "envisioned") to do something in construction business.
He came out to my city, was enthusiastic, etc; and, we spent a day discussing his business idea in person.
After conversations, phone calls, emails; including my market research, he suggested an idea that, well, was already done by multiple software businesses before. Some were selling it for 8k-24k per year, some were selling it for only 90$/mo with lesser functionality. It's an AI product automating a certain knowledge job in an industry which pays 100-140k/year to that job title.
Now. It's a pretty tough software to build. Building it a prototype will take 1mo, and later iterating on it would take 3mo to make good, at least. Because it works with data that is gated.
He suggests raising capital; and in fact we had investor meetings, but all said we're too early.
So my issues are:
1. We are in a competitive industry already. While he has potential customers who - as they told him - would buy his product for 1.5k/mo - I feel like I'll be ripping my customers off when there is an equivalent product that is not worse; and costs as much. The biggest competitor has already raised $30M.
2. Data. The biggest issue is data. E.g. the competitor employs human reviewers to verify the data the software outputs, which of course is fed back into their AI, which means their AI is unbeatable.
3. That's still good money. My income right now is (still, shamefully), window cleaning, and that could be a good opportunity. But then, the engineer part of me knows that those potential clients better buy the competitors product; even if I try, the product won't be good in months. And do I want to spend a year of my life repeating somebody's product?
4. I'm currently doing a R&D project which might translate into raising a seed round. Won't do it solo, but I've been working on it (one of my old AI projects; now being developed to be much more proper as 1. I've gotten more capable and 2. Some critical for my project software become more capable). I've spent the entire February working on it.
And I don't know. Redoing others work to a T seems stupid in software; and also I'll spend a bunch of time working on it, again. It feels as if a good (but short-term!) risk/benefit ratio, but then... is that a year well-spent?
And I'm in doubts.
I'm actively trying to find a software job, of course; now I can build it well. But I don't want to switch projects yet again (would it be, what, 5th project in 6 month)? And the time sunk also is scary.
My thoughts are moving into a No, but I know this can pay bills, even though we both underserve a customer compared to competition and I'll compete (though in a sizeable) market.
Also, this is an exitable venture.
But, if I'll to raise capital (which I might) and build complex software, why not stick with the R&D project, which might pay off very handsomely either way?
I'm in doubts. I doubt I should ask anyone about this, but nevertheless.
---
To clarify, 1 sale will take a month to get to. Maybe a 1.5k/mo sale, but I'm not sure.
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