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Comment by gabemart | Hacker News Reader

How do you get a company to pay 35k for a "concept", a product that doesn't exist yet and that you can't be 100 percent sure how long it will take to build?

I have some hustle and I know enough about sales to appreciate how little I know about sales, but asking a company to pay tens of thousands of dollars up-front for a product you haven't made yet is something I literally can't imagine. Why wouldn't the company laugh you out of the room? What's the upside for them to pay tens of thousands now, assuming huge amounts of risk, when they could just wait for you to build the product and then decide if it's worth buying? What's their upside?

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I can actually answer this. The idea that started my company way back in the 1990s was an ok idea, but it was not fantastic. What was fantastic about it was it had a magic balance between complexity and intuitiveness. What happened when I told people about it is was the first 30 minutes they sat there totally confused, but at some point around the 30 to 45 minute mark they would have an eureka moment where everything would fall into place and they would get it. The effect of this was truely amazing - basically people would come to believe that they had thought of it themselves and of course at that point selling was not a problem - people literally gave me large amounts of money for free because of this effect.

I should mention that while I have had much better ideas since (as well as lots of worse ones), none have ever had that magic quality. All I can say is look for ideas that allow people to discover the eureka moment themselves after 30 minutes. Once you have this you almost can't fail to raise money.

How do you get them to sit there for 30-45 minutes while totally confused?

And can't you give some vague idea of what your...fantastic idea was?

You give an entertaining talk :)

I wanted to avoid going into details as it is unlikely to be of interest to anyone here, but the actual idea eventually ended up as U.S. patent 6,737,253 [1].

1. https://www.google.com/patents/US6737253

So do you. :)

I see. Well, that is not my area of expertise, but it sounds interesting, even if I don't understand it. So you turned that idea into a product or service, and made a business of it? Did you sell it for research or forensic or medical or...? Sounds like a good story, though maybe one you'd have to be in the field to understand the details of.

I actually sold it twice to two different companies. The first time was when it was just an idea and when they passed on it (but after they had given me enough money to prove it) I sold it to the second company for 100x more. At no point did I ever have to give up any equity.

The rather ironic thing is I actually came up with a much better idea [1] to solve the same problem, but I was never able to make any money from it. I am far more proud of the later idea, but it did not have the same magic.

1. http://www.biomedcentral.com/1471-2164/10/344

You do it the same way you sell a $35k website or a $35k/year SaaS product: you paint a better tomorrow that the prospect wants to buy into.

Large, badly managed companies have "budgets" per department that have to be spent or it looks like the department head wasn't working well enough. If they don't spend the budget, someone else gets it for the next cycle. It also gives the (utterly idiotic) impression that the department head wasn't doing a good job because they could have used that money to "grow the business" in some nebulous way. So when you're close to the end of the budget cycle and have 100k left, and a spiffy salesman comes along asking for 35k for his "concept" it looks like a great solution for everyone.

Who knows, maybe it will work out really well and now you've shown incredible "vision". If it doesn't work, you're well within budget and have shown "a great appetite for risk" or something like that.

The author positions his pitch about being all about the product and the value the customer sees in it, when I think a large portion of the potential client's decision to pay 35k is based on this guy's ability to actually bring it to market. If the potential client has no idea who you are, I think it'd be crazy difficult to sell them on a 35k "idea". They'll need to get to know you, and the author doesn't really touch on that point.

You might want to look into Bill Gates' history with IBM.

It doesn't hurt if your mom is on the national board of the United Way with the President of IBM.

How is that any different from any other software project? You talk to the client about their needs, you agree on the price, and you build it.

>How is that any different from any other software project? You talk to the client about their needs, you agree on the price, and you build it.

In other software projects I'm used to, you build something to a client's specifications, and with the expectation you will not license the same codebase to their competitors.

That seems pretty different to getting customers to pay up front for a generic product that will be available on the general market.

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