Interesting Post By Marty Zwilling: “Angel Investor”

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Friday, April 19, 2013

5 Startup Concepts That are Not the Next Big Thing

                        People are always asking me for an inside tip on Internet sites that will be “the next big thing.” Those are hard, since someone has to invent something innovative, but I do have some views on other ideas whose time has come and gone.

In some cases, these are concepts that have already been done too many times, and the space is crowded. In others, the concept has been tried too many times, or no one has yet succeeded in making any money. Or both. Here are my favorites:

  1. Social and business networking sites. Just for      starters, Wikipedia now lists      about 200 sites by name (once over 300), which they claim is just some of      the more notable social networking sites. I still get about one business      “idea” per week for a new networking site, which will combine the “best of      all the sites” into a new one. If you must do one of these, skip the “me      too” and focus on a niche, if you can find an unoccupied one.
  2. Online      dating sites. Feedback from my old diatribe on this      subject tells me that there are over 8,000 existing ones world-wide,      including two or three new ones per day. Most of these will fail, or never      turn a profit. I hope you have a better idea than Women Behind Bars,      or Herpes-Date.com. But then, this is an emotional need every single      seems willing to spend money on (not to mention the 40% more who are      already married).
  3. Search      engines. You can find web sites like the Comprehensive List of Search Engines, that are nothing but a list of 250+ available search      engines.. Remember the three “big gorillas” in this space, Google,      Microsoft, and Yahoo. There may be room here for something really      innovative, but just a better user interface, people prioritized results,      or one millisecond faster will probably not do it. If you have more money      than the incumbents, try it, but don’t look for investors.
  4. Micro      payments, micro loans, micro investments. Micro “everything” has had lots of entrants over the      years, but all are gone, or not making any money. Paying for your ice      cream on your cell phone through Twitter is more trouble than cash, and      getting a $10,000 loan accumulated from 50,000 people is hard to manage.      The latest is “crowd funding” your startup with thousands of tiny      investments. Don’t count on these to save your startup just yet.
  5. Portals      and single sign-on sites. A portal      is a “home page” which you can partition to be the entry to a dozen      others, with a single login to minimize the “yellow stickies” on your      computer. The trouble is there are thousands of portal sites, like My AOL      and My Yahoo, so you need a portal for the portals. Single sign-on is a      technical dream that requires world-wide standards be set before it can be      implemented.

Somewhere below this list is another tier of questionable potential startups, including more calendar sites, blog aggregators, Craigslists, photo sharing sites, music sharing sites, or more instant messaging sites. Web site generators have made it cheap and easy to launch a site, but that doesn’t mean it’s easy to succeed.

In my view, the single biggest reason for startup failures on the Internet is a lack of real innovation. Changing the user interface, and adding a couple of features doesn’t compensate for not being there first (“me too”). The second biggest reason is lack of focus. Combining the features of several successful products will not assure success (“something for everyone”).

For other ideas, the wave has simply passed. Rather than trying to extrapolate linearly from solutions already popular, be the first to solve one of the myriad of current and future problems causing real “pain” in our society. Problems like health care and diseases, or alternative energy solutions, offer a wealth of possibilities, with huge potential paybacks for everyone.

These also have the potential of satisfying a higher purpose (socially conscious), as well as making money. The rewards are greater and longer lasting, and it’s a lot more fun. What’s your idea?

Marty Zwilling

http://www.startupprofessionals.com/

http://whiteplains.dailyvoice.com/business/mobile-checkout-replaces-cash-registers-white-plains-businesses

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Response
5 Startup Concepts that Are The Next Big Thing

I reference Mr. Zwillings’ post above in order that I might offer a contrary view to some of his thoughts and philosophies. I for one would find it thrilling to sit in his seat for a day and listen to new ideas. A wealthy man, I presume, with an incubator for startups. When reviewing the company’s website I cannot help notice the fact that it reads like a management 101 textbook. I can only speculate as to the source of said wealth. I pray it was not accumulated from naïve entrepreneurs willing to pay the advertised $5000 fee for an “Investment Grade” Business Plan. What I do not see listed on the website are the host of successful startups he has brought to market as I see on other Angel Investor sites. I am not sure the list is quite as extensive as he would have us or the Harvard Business Review believe.

A few easy tells offered within seconds of simply glancing at this post alarm me. An image of a man stalled halfway up a ladder, looking through binoculars, off in the far-off void, for what—“next best thing?” Beside him, in the distance, the colorful balloon of opportunity floats slowly away. I must say, I do find the image most appropriate. Academic papers, NPV, risk breakdown structures, Earned Value Management, PowerPoint Presentations; buy a book. The sad fact is, the author informs us up front that he has no idea. The second sentence regarding the hoards of people “always” asking what the next big thing is, he answers plainly—“those are hard, since someone has to invent something innovative.” Aside from that statement being an oxymoron, it actually does hold some truth. It is really hard.

On his startupprofessionals.com, Mr. Zwilling touts the difficulty of investing in startups, citing that one in ten fails. Asked what his average investment in these companies is and states $25,000. I assume that $25,000 comes after the entrepreneur’s $5000 investment in an “Investment Grade” business plan. Do the math, one in ten of his plans leads to an investor, at which point he throws in $25,000 (-$5k he already charged). The nine other poor saps are out $5k; well it is a tough game kid. Win-win, $30,000 guaranteed.

Maybe I am being too hard on Mr. Zwilling, but startup facilitation is an endeavor I find most noble and enormously needed in our country today. Being an efficient project manager does not qualify one to call himself a start up professional. Hosts of actual startup professionals, running successful businesses, would be happy to help you with a business plan for the satisfaction alone.

1) Social and business networking sites – Millenniums are sprinting from Facebook, No room here?
2) Online Dating – Rule 34 (Crude Yes) Multibillion Dollar Industry
3) Search Engines – Plenty of room for advancement in Deep Web Technology, and E.H.R. search
4) Crowd funding & Micro Payments – Just total ignorance not to see the potential here, Even Donald Trump is starting a crowd-sourcing site. And I guess with an estimated 5 Billion Smart Devices in Five Years companies like squareup won’t need any competition at all.
5) Web Portals -The potential here holds the largest growth sector in the country—Electronic Health Records

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