Think I Have a Great Startup Idea, Don't Know Next Steps

Ok, so everyone thinks they have the next big great idea. Let's just assume for the sake of this question that I really DO have a good/great idea.

Some background and basic. I'm obviously not going to share the actual idea, but can give some general parameters:

I had this idea quite a long time ago (over ten years ago). At the time I had it, it wasn't technically feasible--at minimum, with newer technology executing on this idea is much, much easier.

The product is a piece of software, basically Software as a Service (Saas).

I am a software architect with fifteen years of experience, and have the expertise necessary to build a system of this scale. However, the undertaking to even get a basic prototype up is beyond my capacity right now (see more on this below).

I have (at least) two other (excellent) resources who are involved in my idea, and would be interested in pursuing it if it got off the ground. However, we did actually start up the project and each tried to commit ten hours a week to working on it. It ended up not going anywhere, because all of us work a pretty hard at our day jobs, and that made it difficult to expend additional energy on something that seemed like it had such a slim chance of going anywhere (to be clear--we all believe in the idea, the amount of work just seemed overwhelming).

I really like my current job, and I work about 50 hours every week. I could scale my hours back if necessary, and I DO realize that any kind of self-employment situation requires some sacrifice to be successful.

On the note of sacrifice, I could come up with some small amount of money, but nothing on the scale of what would be needed to get this off the ground. I would also take a large cut in pay to be able to make this happen. I could not, however, work without pay for any amount of time.

I don't have a business plan (nor would I know where to begin), but I feel strongly (however naively) that this idea could be huge if it got off the ground.

I have no real contacts as far as investors go (e.g. VC firms).

My main questions are:

1. Is it unheard of to get funding for an "idea", without a proof of concept or some record of executing on it? If so, what kind of people should I be talking to?
2. How would one go about protecting the idea if one were going to pitch it?

Update Thanks for all the great replies. I guess it comes down to:

1. Getting off my ass and putting SOMETHING together in terms of a minimum product or
2. Admitting to myself that it will never happen and let it go.

Just to explain a little further--I think the team would have been willing to put in the 5-10 hours a week if we felt like it would show enough progress to be worthwhile in a reasonable period of time (say a year). The undertaking was so large that it didn't seem like we were getting anywhere. Starting smaller might solve that.

Also, to really make a go of it, someone would have to really FUND it, like with $1M or more (maybe much more) dollars--the idea is roughly along the lines of an ebay (not quite to that scale) with a lot of technical complexity and data. It would take a pretty big team to get it rolling. Again, it seems like the anwser is to start smaller.

In any case, quite a lot here to think about. Thanks again for the responses.

Why would I invest in your company if you don't believe it's worth putting an extra 10 hours/week into right now?

1. That is not unheard of, but it is uncommon. The startup incubators sometimes do this (Y combinator, Sproutbox, etc)...but that's probably not a "quit your day job" scenario. Maybe so though....I'd definitely start talking to some angel investors or VCs whenever you can. Find out more about what they want to see from your project.
2. You're really not going to be able to pitch the idea and protect it. I'm personally very much against the "secret" idea, because an idea is typically worth next to nothing. NO ONE is going to sign an NDA or anything like that prior to your pitch. It's all risk to do so.

To be honest, I think your best bet is to restrict your idea down to its core, and get it built. No matter what it takes, get SOMETHING that you can get in the hands of your target market. Once you have 10+ people giving feedback on it, you'll have a clearer idea of what your product/service should do for them.

Once you have 10+ people paying for it, you're onto something and it's possible to get something going.

Until then, you're a guy with an idea just like the 100+ people that try to contact every VC in the world, every day.

The good news? You have a great idea. The bad news? So does everyone else.

Time to hustle.

Reality check:

can't/won't:

1. You won't be able to get financed on an IDEA. Everyone has ideas, few can execute. Those who can't execute are irrelevant to VC's. They won't pay you to find out which one are you: dreamer or executor. You can't protect an IDEA.
2. NO one will sign a document restricting him from ANYTHING you're about to say.

can:

1. If you believe in it, build it.
2. Launch it in a limited way, alpha, beta
3. collect information about user traction, retention (funnel diagrams, from hits to paid subscription)
4. ARM yourself with
   
   • Proof you are an executor
   • Data showing you're a successful executor and have potential (good user traction/retention)
5. Go to VC's...

Good luck

Getting a prototype built with minimum viable features would be huge in terms of you being able to get funding. Can you think of building even a subset of features with a few targeted early adopters in mind? Don't let the grand vision stop you from getting something tangible realized. It makes it so much more compelling to say not only that you have a proto built but to say that you've gotten user feedback or even better, someone using at least some working part of your idea.

Once you have some proof of concept - better yet, something minimal but usable - the rest of the pieces can fall in place. Nobody can tell you that getting funding based on a business plan alone - an idea - is impossible, but do you have prior experience in a successful start-up, or some other blue chip criteria that will attract money to you? Early stage investing, I was told by my own investors, is a lot about the team if there's no product/revenue/track record, etc.

Cut the idea down and release a unfinished product to get some feedback - when you have no customers and no brand then people are far more forgiving that you would think.

Put the team above the idea!. Think about who you know that could help you get this thing to fly and share the company fairly with them (it's better to own 25% of a success than a 100% of a failure). Most investors invest in the team because they think they can make the idea succede, not in the idea itself.

If nessary then try to outsource some of it (in particular the parts that are just grunt work, such as Salesforce/PayPal integration, ...). I have successfully used outsourcing servies such as ODesk and CrowdSpring for my own startups and can attest that these places will take you a long way for your own dollars (the easiest tasks to outsource are generally grunt work and tasks that are easy to explain but takes considerable time to execute).

Finally build a prototype using a tool such as Balsamiq and take it to potential customers to get some feedback. Go as the entire team so you can brainstorm together on the feedback you get. A extra benefit from talking to customers is that you improve your sales pitch which can later come in handy when talking to a potential investor.

@Phil, along the same lines as what Phil said, think about it from an investor's perspective. They see ideas all day / every day. You need to show them why it's worth their money - and that means a business PLAN. It doesn't mean a 40 page printed business plan, but it does require you to be able to enunciate your plan for the business. What you need, who your competitors are, how you will bring it to market, what your sales cycle looks like, what pain you solve, how big the market looks, etc. etc.

If you are even pre-prototype, I don't expect you will have much success in getting venture capital. However, you COULD potentially get angel investor money, if you can pitch your plan to an angel investor.

Good luck... nothing of the scale you are talking about comes easy. Either you believe in your idea and commit to it, or move on to something else. 10 years is a long time to be thinking about something, and I'm sure you'd be kicking yourself if you found someone else doing it successfully!

Andy has it pretty much spot on.

Let's explore a little further...

None of the three of you can spare enough time to make a little progress, why is 50k seed capital going to change that? Even if you do find someone willing to invest, if it's really just at the level of an idea, you're not going to get that much, and you'll have to give away a pretty large chunk of the equity to get it. Ideas aren't worth much - it's the implementation adds value.

So is the problem the capital, or the sheer scale of the idea?

Take an agile perspective, and figure out the simplest thing that could possibly work that is a step en route to your goal. Cut it down to the absolute minimum that still has some functionality ... is it still so overwhelming? Can it start attracting users at that level? Now you have something, and a plan for more, you actually have a case for investment.

Once you have something, anything out there you can start reacting to user feedback and testing your hunches. Far better to do that early than build something huge in the hope you have it spot on.

Without telling anyone your idea, have you considered paying a few freelancers to get a rough beta of your idea happening? Get A Freelancer is a good choice if you're looking for semi-cheap labour. Other than that, you're not going to be able to get investment without disclosing your idea and protecting it.

At least if you have your idea semi-developed you don't have to worry about someone else taking your idea because you've already started on it. And as pointed out, ideas are useless without the execution. Good luck though, I know the feeling of having an idea and not wanting to tell others about it out of fear it'll be stolen from you.

I would pitch the idea to 4-5 non family or friends. Forget an NDA, very few businesses have any spare capacity to suddenly grab an idea when they hear it.

Can you pursuade these 4-5 people it's a great idea? Even if they say yes, ask if they'd invest 1,000 Euros/Dollars in the idea. That soon gets to their real answer.

If you can't pursuade these people informally, you need to work out if it's your pitch or idea.

In short, everyone thinks their idea is great, get early feedback to double check someone else thinks that too. It will either save you time in starting at all, or be the start of an iterative process of improvement.