Mark Cuban pitched an idea over on his blog in which he offers to fund business plans for people, but only if:
- People completely detail out their business plan in public.
- The businesses must show a profit within 90 days.
- You use the bank of Mark’s choice and allow him control over expenditures.
Unfortunately, I believe Mark is off base with this concept, and left the following comment over there on his blog. I doubt he’ll respond, but he did at least get people talking – even though he might have done more harm than good.
I’ve been reading your blog for quite a while. Never left a comment before. Decided now was the time.
First of all, let’s be clear about one thing. I don’t want your money. Won’t take it if you offer it just on principle of being entirely candid. Now that that’s out of the way.
I’m not sure I understand your impetus for putting this “offer” out there? Trying to figure out if it is a publicity stunt, a VC pitch in disguise, an “off the top of your head” idea, or what? But I fail to see how asking all of these people to pitch an idea in the open and asking them to “open source” the project adds value?
You are asking people, in essence, to forego first mover advantage on any sort of good idea. You are asking them to forego the ability to get patent protection, copyright, or any other sort of valuable intellectual property. This will only serve to weaken fledgling businesses – not help them get launched.
In addition to that, you’ve placed restrictions on cash flow and profitability that will have the exact opposite effect on employment as you purport to be seeking. Anyone looking to hire employees can barely get them up to speed in 60 days much less have the business break even. This means you are pretty much limiting the opportunities to one man shows in fields that have extremely low barriers to entry.
I would suggest that if you wish you really help fund businesses and put people to work you should change your parameters.
– Allow 6 months to reach break even, 9 to turn a profit.
– Ensure that the plan requires the business to actually hire a minimum number of employees (like 3-4).
– Remove the restriction on generating “any” ad revenue in lieu of ad revenue being only a secondary source (if a business can be profitable without ads, why not allow ads as a bonus?)
– Ease up on the cash flow and banking restrictions. You can’t tell people that you won’t be available, but that you have to approve of monetary decisions. You’ll stifle the business.
– And for God’s sake, don’t require them to publish the entire plan in the open and encourage stealing of the idea!
I know that you said that you are “trying not to be a VC”, but frankly these “terms” are worse than any VC terms I’ve ever seen. They are unrealistic when it comes to creating real employment, they are more restrictive than necessary, and they just aren’t going to work.
How about doing something completely different? Why don’t you buy a small building which can be partitioned into “open source office space” and give small businesses a free place to actually get together, work and share ideas. Augment this by inviting successful business people to come in and help with brainstorming sessions, etc. And perhaps organize a group of Angel investors to listen to real business plans. (I’d help, and even consider Angel investing if you did this.)
In short, I’m a fan of the Open Source model. But I think the way you’ve gone about open sourcing this particular concept is a bit off.
Cheers, and good luck!
Of course, Mark is as free to do with his money as the rest of us are. But I hope that he changes his mind about this particular project because I don’t see anything good coming of it.