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Comment by mjnaus | Hacker News Reader

I am having somewhat of a hard time figuring out how this "stimulus plan" helps the economy, as it appears it's intended.

If a startup is able to reach profitability within three months, this startup surely wouldn't need Mark Cuban's money to move forward and create jobs at some point in the future. They would have a rather big chance at succeeding even without this extra cash.

Mark presents this initiative as doing something for the greater good and the economy, however investing in companies that need to be profitable within three months (assuming funding will stop if they don't reach profitability within that time frame) is not exactly a risky investment and looks more like an easy way into something new for Mark.

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"I am having somewhat of a hard time figuring out how this "stimulus plan" helps the economy, as it appears it's intended.

If a startup is able to reach profitability within three months, this startup surely wouldn't need Mark Cuban's money to move forward and create jobs at some point in the future."

Not everyone has a bankroll sitting in a savings account ready to start a business. Mark's idea solves that.

And even if a person does have that bankroll, he may not want to invest it in the new business. Recessions don't end overnight because people hoard instead of spend money. The worse things get, the more people want to save for the long term, which prolongs the recession. Mark's idea solves that case, too.

Mark will fund promising ideas which need the cash now and can put it to good use. The cash he gives will be mostly gone by 90 days. That cash is a direct injection into the local and national economy.

So what gets accomplished is:

1. a possible wealth generating/job creating business is started

2. spending occurs when the natural inclination is to save

Both will have stimulative effects on the economy.

Really depends what the scope of your project is. I'm a developer, I could build a site for the cost of hosting (and time). If it can make a few bucks a month its "profitable". But you still have a ways until you are generating enough revenue to have a payroll, benefits, an office, etc.

No one really knows what the scope of his investment is. Mark is a smart guy, I'm sure this is a testing stage. So, he gives you a few thousand dollars (if that) to "test" for 90 days. If it has potential to make money, who knows where it could go.

the "open source" nature of it perhaps? The fact that these business plans need to be posted in full - means that other places can duplicate them.

(also - that's probably the secret - this is probably not a tech play.... Think small local (but replicatable) businesses)

You nailed it. It's a great local stimulus and it could put a bunch of people back to work, locally. The condition to be sustainable means that he doesn't want to pay your salary for more than a few months, while you open your store.

The fact that it's open means every person in every town can open the same store and succeed as well, without directly competing.

:) But when this community thinks startup / new business we instantly think google/facebook/twitter without looking at other alternatives.

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