The Incubator Idea

English: Logo used for Rockstar Games's Grand ...
English: Logo used for Rockstar Games's Grand Theft Auto series, appearing, with some modifications in all GTA games since Grand Theft Auto 3. Português: Logo usado para a série Grand Theft Auto da Rockstar Games, aparecendo, com algumas modificações, em todos os jogos de GTA desde Grand Theft Auto 3. (Photo credit: Wikipedia)
I am in touch with one individual, and two groups in the New York Nepali community right now. These are people who desire to launch tech startups, and would like help. Thakali Kitchen, Yak, Malingo all have websites built by my team. From there to helping people with their tech startups is a long way. I am glad for the ground covered.

In each case the idea is truly excellent. Between the three teams there are about eight ideas that I have come across. I have shot down one. I have called another mediocre. Some excellent ideas were simply let go. One idea was taken all the way to version 1. But the result was not that good. 300 downloads of an app is not impressive. I still think the idea is good. But for version two I have made a case for a 5% equity for my team, and a total say in the feature set of the app. I saw the mistakes that were made as they were made in version 1. But I had no control over the features. I was just to build what was asked of me. Big mistake.

50,000 is the magic number. You need 50,000 people using your app before venture capitalists will take a look at you and possibly invest money. Angel investors can come in earlier than that. But even early means a few thousand users at the least.

One guy on the second team came up with this brilliant, simple idea. But he chose not to follow through. Some other client independent of that approached my team with a very similar idea for the Kuwait market. It was a huge hit. I am talking close to half a million downloads. He quickly turned around and sold it for a million dollars. This was this past December. But we did not have equity. The failed app and the successful app both taught us to take equity when building something for a startup. And now that is a rule with my team. We take both dollars and equity. Dollars alone don’t suffice.

Excellent idea is a prerequisite. Without that you can’t move. But if that excellent idea is not only your beginning point but also your end point, you don’t have a company, you are not going to create wealth. You got to move.

Now I take a sign up payment, to be credited towards the down payment within days of talks starting. If your idea is excellent, and you intend to pursue it, your sign up payment is due. That separates the serious from those merely thinking about doing it.

The third team is five friends with an excellent idea who could raise 100K just among themselves. Version 1 work on an app tends to be in the 20K range. There are other expenses like legal, and marketing. You could not launch a Thakali Kitchen or a Yak with 100K, hardly 100 million dollar ideas, but you could launch a tech startup with 50K that, if you could turn into a hit, could end up with a market value of 100 million dollars in something like five years.

Two years back I could have helped. I have had to expand my team. A year from now, I will not be able to pick up clients like I can now. I expect to be too busy with my own startup.

You can be smart, you can be hardworking, but if you are risk averse, you are not going to be able to do a tech startup. This is not for someone looking for “guarantees.” Often times you have to move at full speed with little information. I could not convince or train someone to be a tech entrepreneur. Either someone is or is not a tech entrepreneur. I can only hope to find them.

You come up with an excellent idea, you raise round 1 money, you build version 1 of the product, you launch and do some fierce marketing to try and hit 50,000 users in the shortest possible time, along the way you raise round 2 money, something in the million dollar range, and you move towards version 2 of your product, you build your team along the way. Excellent execution is everything. A love for risks is a good thing. Be humble. Read. Learn. Take the plunge.

Or you could skip all that and simply invest 5K or 10K in my ambitious Augmented Reality Mobile Game. I think 5K invested in my startup today should be a million dollars in five years. Three of my friends came in at 5K each. I made it risk free for them.

Should the venture fail, from the day of the failure, I will have 12 months to return their 5K to them, as if it were a personal loan. Should the venture succeed, I get 5% of the growth their investment might see. So if this 5K becomes a million dollars in five years, I get 5% of that million, namely 50K, and they get the rest.

Gaming is the next big thing after movies, just like movies were the next big thing after radio entertainment. Grand Theft Auto making three billion dollars in three days after its last release proved the point beyond doubt. No movie has ever done anything like that.

We think Augmented Reality is one of the next big things in gaming itself.

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