Startuplet - our internal requirements
October 11, 2008 – 3:02 amFollowing up the topic of startuplets…
The site outlines just the basic idea, we’re using a little bit detailed checklist:
40 hours of development:
- that is taken exactly; it doesn’t include idea polishing, financial modeling, screen drafting, et cetera
- it’s taken seriously: if the product isn’t usable after 40 development hours invested - the project is killed (*)
detailed financial revenue model:
- there should be explicitly defined hypotheses, e.g. conversion rates, expected average income per paid user, etc
- there should be 3 sets of numbers for hypotheses: pessimistic, mild and optimistic modes; judging from the latest news (DJIA dipped below 8K today!), the pessimistic model should be taken at least as a primary and expected one
- revenue model should be quantitative - there should be numbers (too many developers miss that)
- NPV is calculated using doubled credit rate in Ukraine for businesses; it’s traditionally high and now is 36% annually
- we use 12 month investment horizon and forecast for another 12 months
- NPV for all three modes (pessimistic, mild and optimistic) should be positive
and finally, if after 6 month from the start actual NPV is negative project would be killed (*).
And, of course, the most interesting - there should be an implementable buzz plan that should be linked to the same NPV model.
(*) killed = project would be made open-source
More on these later
