The Financial Feasibility of Startup Ideas
Well its only day two of my latest startup endeavor and I’m already running into the same problem I’ve encounter with my last two projects: financial feasibility. If you happen to have read my last blog post, I wrote about attempting to build “The Phone Book of the Internet.” The idea sounds like a no-brainer to me— a real case of “Why hasn’t someone already done this?” Unfortunately, I think I may discovered the answer.
A little back-of-the-envelope-math reveals that the cost to build a “Phone Book of the Internet” would likely cost in the ballpark of $100,000,000 or more. Assuming that an online phone book for the United States would likely need around 100,000,000 names and phone numbers, times $1 a piece to obtain each phone number, you end up with a figure of $100,000,000!
My startup has limited funds, so I must be very thoughtful with how I spend those funds. I could easily go and drop $1,000 on this project to get started on my Phone Book of the Internet, but would that amount to anything? — a simple website with a directory of 1,000 names and phone numbers. Hmm… maybe this is why no one has gone ahead and built a phone book for the Internet. The cost to do so would likely be in the hundred million dollar range. That’s a pretty big price tag! And if you aren’t able to hit scale, would your project even matter?
So I find myself in the same predicament as before: I have a decent idea, something that should exist in the world yet doesn’t, but the idea looks like it will likely cost a fortune.