Hi there, I would like to get your perspective on this idea, does it make sense?, I happen to think dev shops are broken, and this may be a better approach, let me know your thoughts?
I don't think the math works. $5k + $500/m, for 6 months: that tops out at $160,000 yearly revenue for the 20 projects. Even if it's the same 4 employees spread across all projects, that's $40k yearly salary each as a base. Sounds bad!
It'd take years for any winning bets to pay off and I don't know how you'd pay your employees.
I have a feeling they have some VC backing and they're just farming the work out to cheap overseas companies and freelancers. Sounds like it's some quasi-incubator banking on finding a billion dollar unicorn.
The one way it makes sense is as a mechanism to buy cheap equity stakes. The person running the scheme adds more money to pay market rates for sufficient staff, which effectively buys them a 5% stake in each company.
If it is the same four people across all companies, and their fully loaded cost is 200k (not a lot in the valley, but plenty in many other places), then that works out as 32k for a 5% stake. Compare that to Y Combinator's 125k for 7%.
If you accept that you can't run 20 startups with four people, no matter how much Club-Mate you feed them, then you could try staffing each position at 25%, and be paying 200k for that 5%. Not so hot, but maybe still good enough?
Wouldn't be too bad for me (as a dev) if it's with the understanding that I'd be working part-time. Even 20 hours a week would net a pretty decent junior-level pay (and 10 would be even better).
They'd have to be really simple projects, though, if I'm expected to bang out 20 of 'em a year.
Dev shops aren't broken, and this idea does not make sense. No quality work can come out of it, and honestly it sounds more like a trap or a funnel for scammers to front as entrepreneurs.
I've worked in a similar way to this in the past and at similar price points.
Most of the time I ended up with one of two kinds of founder:
1) Very price senstive with a lack of investment mindset. With that kind of budget they would have been better off investing in themselves to either:
a) Learn to code or develop some other valuable skills.
b) Build a profitable service business.
2) Very busy running another business without the time to do the work of finding customers. They would have been better off either:
a) Focusing on growing their current service business.
b) Creating a non-software product such as a course, book, templates or a newsletter.
In general non-developers need to be prepared to invest at least an order of magnitude more than that. Any less and it's unlikely they'll take it seriously enough to succeed.
This is assuming you are aiming at clients with North American/European levels of purchasing power.
1) the pay for the technical tesm is in a country where you can pay sub $25k/yr (which is most countries on the planet but rules out North America or most of Europe). Because there won’t be enough money to pay much more.
2) So long as all these projects are technically simple. Don’t be an incubator for new ideas. Make CRUD apps for orgs that want to replace a spreadsheet instead.
But as some kind of incubator or operating in EU/US? No.
Software developers around the world are not going to work for $2k/mo. Even in cheaper countries they realize it takes some money to get into middle class, or they would consider moving closer to where the action is.
Especially since you need a few generalists who should work with minimal oversight (and indeed provide one).
I can't imagine getting anything decent for that level of pay. Unless you're essentially a venture fund making long bets on that 5% equity and you have a ton of upfront funding.
The site has zero google ranking. It looks like it was created just yesterday. In addition, there is no any information, no portfolio. Very doubtful project. Although, it may be really ambitious idea. But so far, all I see is a scam.
By the way, I have seen a big scam with excellent Google SEO thanks to legal threats and court decisions to remove any article exposing the scam and native advertising in many online newspapers and a large network of fake websites.
Is that technical team spread across all ten projects? If so that's basically 4h per week per company, barely enough to remember what they're building.
You might want to showcase your profile and what makes you valuable. Differentiating on commercials might work, but I hope you're aware of risks that come with fixed billing.
Also, that pricing sounds insane for a 4 people team. You're probably not looking for engagements that last more than a month, but even with that I don't know how you can make decent income to pay the team.
This might be a way to get a post-mvp idea that was built using No-Code/Low-Code to a code base but for a new unproven idea I would say buyer-beware, unlikely to get you what you want.
Really depends on where you are I guess, but I found no info about you in the link.. also the top right link that says how many spots are left sends me to google.
There has been an uprise of agencies/studios/dev shops trying to make their offering "limited" and thus promoting some fear of missing out by feigning scarcity.
I think these ideas can be creative, but I feel bad for those who can't do the math for themselves and also build the team/contractors that would likely make them successful in the long run.
More and more "startups" are just disguised digital agencies.
1: Value creation
--> pro it creates low entrey
--> con You need to get in
--> Overal I don´t think it´s a smart move to let people decide if something is going to valueble when they are not the valid expert in a certain domain -->
This video explains it = https://youtu.be/8ZHLCDCPo_U?t=2253
2: Economical
--> pro basicly everyone can start
--> con everyone can start
--> Overal i think it´s hard to overcome bias. The best way to outperform thoughts and words of bias is to look at actions over time.
3: short term vs long term
--> pro it´s intresting in downturn markets for singles now
--> con but singles can build easier faster even in downturn markets.
--> Overal
Where's the portfolio? Someone is supposed to take their word on some text and a picture.
What issues do you have with dev shops? How does this solve those issues? How do you even know if this solves the issues, there is literally no information?
What tech stack do they work with? If I have my own engineers how do I know what you are going to offload to them?
I do not think it is a good idea because the people building the project have no skin in the game.
Your initial ideas need constant iteration as you interact with reality to see what works.
A team that will leave in a few months for the next thing have no incentive for iteration or great execution - both which are needed to interact with reality to find something that works.
[+] [-] mirthturtle|3 years ago|reply
It'd take years for any winning bets to pay off and I don't know how you'd pay your employees.
[+] [-] weare138|3 years ago|reply
[+] [-] klohto|3 years ago|reply
[+] [-] twic|3 years ago|reply
If it is the same four people across all companies, and their fully loaded cost is 200k (not a lot in the valley, but plenty in many other places), then that works out as 32k for a 5% stake. Compare that to Y Combinator's 125k for 7%.
If you accept that you can't run 20 startups with four people, no matter how much Club-Mate you feed them, then you could try staffing each position at 25%, and be paying 200k for that 5%. Not so hot, but maybe still good enough?
[+] [-] yellowapple|3 years ago|reply
They'd have to be really simple projects, though, if I'm expected to bang out 20 of 'em a year.
[+] [-] yessirwhatever|3 years ago|reply
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] jot|3 years ago|reply
Most of the time I ended up with one of two kinds of founder:
1) Very price senstive with a lack of investment mindset. With that kind of budget they would have been better off investing in themselves to either: a) Learn to code or develop some other valuable skills. b) Build a profitable service business.
2) Very busy running another business without the time to do the work of finding customers. They would have been better off either: a) Focusing on growing their current service business. b) Creating a non-software product such as a course, book, templates or a newsletter.
In general non-developers need to be prepared to invest at least an order of magnitude more than that. Any less and it's unlikely they'll take it seriously enough to succeed.
This is assuming you are aiming at clients with North American/European levels of purchasing power.
[+] [-] AhmedMujtaba|3 years ago|reply
[+] [-] alkonaut|3 years ago|reply
1) the pay for the technical tesm is in a country where you can pay sub $25k/yr (which is most countries on the planet but rules out North America or most of Europe). Because there won’t be enough money to pay much more.
2) So long as all these projects are technically simple. Don’t be an incubator for new ideas. Make CRUD apps for orgs that want to replace a spreadsheet instead.
But as some kind of incubator or operating in EU/US? No.
[+] [-] thriftwy|3 years ago|reply
Especially since you need a few generalists who should work with minimal oversight (and indeed provide one).
[+] [-] superb-owl|3 years ago|reply
[+] [-] Kenneth39|3 years ago|reply
[+] [-] speedgoose|3 years ago|reply
[+] [-] superb-owl|3 years ago|reply
[+] [-] muzani|3 years ago|reply
The wording implies that a project gets its own team, but this is an assumption.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] potamic|3 years ago|reply
Also, that pricing sounds insane for a 4 people team. You're probably not looking for engagements that last more than a month, but even with that I don't know how you can make decent income to pay the team.
[+] [-] foobiekr|3 years ago|reply
[+] [-] muzani|3 years ago|reply
[+] [-] reflect|3 years ago|reply
[+] [-] sickmartian|3 years ago|reply
[+] [-] thenerdhead|3 years ago|reply
I think these ideas can be creative, but I feel bad for those who can't do the math for themselves and also build the team/contractors that would likely make them successful in the long run.
More and more "startups" are just disguised digital agencies.
[+] [-] arrow7000|3 years ago|reply
[+] [-] RonaldOlzheim|3 years ago|reply
1: Value creation --> pro it creates low entrey --> con You need to get in --> Overal I don´t think it´s a smart move to let people decide if something is going to valueble when they are not the valid expert in a certain domain --> This video explains it = https://youtu.be/8ZHLCDCPo_U?t=2253
2: Economical --> pro basicly everyone can start --> con everyone can start --> Overal i think it´s hard to overcome bias. The best way to outperform thoughts and words of bias is to look at actions over time.
3: short term vs long term --> pro it´s intresting in downturn markets for singles now --> con but singles can build easier faster even in downturn markets. --> Overal
= I think internal motivation and timing are key.
The single biggest reason why start-ups succeed | Bill Gross https://youtu.be/bNpx7gpSqbY?t=324
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] ImPleadThe5th|3 years ago|reply
What issues do you have with dev shops? How does this solve those issues? How do you even know if this solves the issues, there is literally no information?
What tech stack do they work with? If I have my own engineers how do I know what you are going to offload to them?
[+] [-] justsomeuser|3 years ago|reply
Your initial ideas need constant iteration as you interact with reality to see what works.
A team that will leave in a few months for the next thing have no incentive for iteration or great execution - both which are needed to interact with reality to find something that works.
[+] [-] rodolphoarruda|3 years ago|reply