{"id":396,"date":"2011-08-10T12:06:15","date_gmt":"2011-08-10T16:06:15","guid":{"rendered":"http:\/\/blog.payne.org\/?p=396"},"modified":"2011-08-10T12:06:15","modified_gmt":"2011-08-10T16:06:15","slug":"lottery-avoidance-require-real-capital","status":"publish","type":"post","link":"https:\/\/payne.org\/blog\/lottery-avoidance-require-real-capital\/","title":{"rendered":"Lottery Avoidance:  Require Real Capital"},"content":{"rendered":"<p>Continuing my <a href=\"http:\/\/blog.payne.org\/2011\/07\/29\/the-entrepreneurial-lottery\/\">ad-hoc series on avoiding the entrepreneurial lottery<\/a>, another way of avoiding lottery odds is to require real capital for your project (and to get it funded).<\/p>\n<p>When we started <a href=\"http:\/\/en.wikipedia.org\/wiki\/OpenMarket\">Open Market<\/a> in 1994, a basic Unix server and SQL database cost $100-200k. \u00a0It took real money to build Internet companies, and that meant competition was limited by available capital.<\/p>\n<p>Now, anyone with a $500 laptop can start an Internet company (or copy <em>your<\/em> idea). \u00a0Tools are free, and hosting starts out free. \u00a0As a result, there seem to be as many would-be Internet entrepreneurs as there are aspiring novelists.<\/p>\n<p>If your idea needs real capital (beyond salaries), you&#8217;ll have a much narrower competitive field. \u00a0Sure, there&#8217;s a lot of venture and angel funding available, but getting funding is a filtering function and barrier to entry.<\/p>\n<p>VistaPrint is a great example: \u00a0though they initially outsourced their printing, they ended up spending millions on their own print operation (fed with custom software). \u00a0They weren&#8217;t going to find any serious direct competition from a Y Combinator project team.<\/p>\n<p>(Note: \u00a0raising capital for customer acquisition is not enough of a differentiator. \u00a0 You&#8217;ll still compete with companies finding customers in capital-efficient ways. \u00a0See my <a href=\"http:\/\/blog.payne.org\/2011\/03\/17\/how-are-you-acquiring-customers\/\">article on customer acquisition<\/a>.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Continuing my ad-hoc series on avoiding the entrepreneurial lottery, another way of avoiding lottery odds is to require real capital for your project (and to get it funded). When we started Open Market in 1994, a basic Unix server and &hellip; <a href=\"https:\/\/payne.org\/blog\/lottery-avoidance-require-real-capital\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-396","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/comments?post=396"}],"version-history":[{"count":0,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/posts\/396\/revisions"}],"wp:attachment":[{"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/media?parent=396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/categories?post=396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/payne.org\/blog\/wp-json\/wp\/v2\/tags?post=396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}