Discussing startup ideas

A couple months back, there was a topic on here about becoming self-employed (see http://tinyurl.com/mcqw7f). Although it’s not for everyone, it seems as though there are quite a few people on AF that are seeking to pursue such an opportunity and have the desire to make it happen. Now that CFA is done (hopefully for good, but at least for the next 6 months for me), I’ve seen a lot of threads with people asking what they should do with all their new found free time (get another designation, Wall Street Prep, MBA, etc.). For me, starting my own business is priority number one. That being said, I am interested to see if there are others who currently have the same goals who would be interested in discussing ideas. Let me know your thoughts.

I wanted to start an internet company but was shot down when I posted my idea on this forum so I’m still stuck in the sh!tty world of finance.

I’d like to start an affordable housing development company. You’d think it’d be relatively easy–just like being a regular developer, right? However, the transactions are sooooo complicated. Most people successful in this area have years and years of experience in the affordable housing industry and a ton of contacts inside local government. I’m about 2 years in and it’s only now starting to clear up some. So, that idea is another 8-10 years away at least.

I have a friend who started an affordable housing company a few years ago. He took out a few million in loans and sunk several hundred thousand of his own money in his company. He ended up making about $5 million personally in 2006, but lost it all in 2007-2008. Not for those who can’t stand the heat.

Hmmm, he must’ve charged some nice developer fees but built a lot of stuff in Florida or Memphis, TN.

He built a lot of stuff in New Orleans post-Katrina and also put up some huge complexes in Iowa and Nebraska. His downfall was reinvesting all of his personal profits in new businesses in late 2007-08 and then couldn’t finance the balance of the loans when the credit markets shut down.

Ahh yes, those little things called bridge loans will haunt you if you get greedy.

JohnThainsLimoDriver Wrote: ------------------------------------------------------- > I wanted to start an internet company but was shot > down when I posted my idea on this forum so I’m > still stuck in the sh!tty world of finance. If only I could trade you my old job for your job.

jond2062, I’m on the same boat. Want to take an MBA (targeting top 5 school) this year but decided to put it on hold to concentrate on the new business I have going with a relative. Let’s see where it goes (should pan out in the next year or two)

Hey all, thanks for the responses. I think there are a lot of opportunities out there for successful businesses in even the most simple areas. There’s a great video of a presentation by David Heinemeier Hansson of 37Signals from YCombinator Startup School 2008 (http://www.omnisio.com/startupschool08/david-heinemeier-hansson-at-startup-school-08) that embodies this idea. Not sure if anyone has seen it, but the point is basically that while everyone is busy trying to start the next Facebook or YouTube, there are a ton of great opportunities to start successful businesses on a much smaller scale. He relates it to the idea that there isn’t just one great Italian restaurant, there are in fact quite a few. The goal then is to find something you are passionate about, figure out how to get paid doing it, and create a nice business with great work/life balance. Although they aren’t always the sexiest/most cutting edge businesses, many of them can provide a lot of what most entrepreneurs are seeking.

By the way the first link in my original post is a tinyurl. I didn’t realize AF blocked those. tinyurl dot com/mcqw7f

+1 for this thread

ozzie123: Good for you. I wish you the best of luck. If you don’t mind me asking, what kind of business are you working on? Jon

No one is going to discuss a real business plan on here. They would be too afraid of someone stealing it. People sign NDAs in real life.

ozzie123 Wrote: ------------------------------------------------------- > jond2062, I’m on the same boat. Want to take an > MBA (targeting top 5 school) this year but decided > to put it on hold to concentrate on the new > business I have going with a relative. Let’s see > where it goes (should pan out in the next year or > two) Business plan or it doesn’t exist.

I saw a scam off the Sopranos where they would have an individual buy some crappy houses in the hood. Then sell those to an organization that would overpay for these properties, giving the newly bought owner a nice profit, and since the organization was backed by the US govt, the bank would give them the loans needed. Then the org. would default on those loans, and govt would pick up the bill… Everyone was in on it. I think this could work. Who is with me?

Ideas are a dime a dozen. Execution is the key. If you think you need an NDA to discuss a general business idea, you’ll never get the chance to talk to a lot of industry experts and VCs. Most of them will laugh at you as they refuse to sign. NDAs are for accessing proprietary processes, financial data, software code, etc., not for protecting ideas for which you are likely not the first or last person to have thought of them. That being said, ozzie123 is free to discuss as little or as much as he wants.

LOL no JTLD, definitely not going to get out the biz plan out there (in fact, I’m still running some models to achieve max profit - gosh who would’ve thought that modeling for start-up is quite different than modeling for established companies?) It’s actually a mini-refineries with around $50Mish startup capital. We see that the crack spread (difference between the crude price + related cost vs the price we charge customers) isn’t get any much narrower for the next couple of years, at least in our region. So we assume that there’s a little downside risk that we can hedge without bleeding our eyes out while there are big possibility that the spread will widen in the near future. It’s of course arguable because I believe there are some people who would’ve said otherwise. But hey, it’s the risk we’re willing to take - that’s after all the art of a startup right? Still hasn’t leave my full-time job yet because we’re still pitching the ideas to potential investors. That’s why I said “we’ll see in a year or two” :wink:

One of the best parts about starting a business in today’s world is that it often doesn’t require you to leave your day job at the outset. This provides so much flexibility and at the same time reduces risk. You don’t have to put all your eggs in one basket until you’ve made enough headway on your startup that it proves to be worth your full-time effort.

And borrowing money is cheap.