Good idea or not?

Good idea or not?
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#1

I was in school the other day and thought of a idea. I don’t know if this is already a thing.

What if there was a website, where a company can go to offer a contract to build a website. You as the freelance programmer, can buy that contract and in return you get a small amount, like 2% of the profit from the website, for say, 10 years?

This prevents people from scamming companies with bad websites and taking there money. You will only buy a contract if you think the company ideas are good, you can build a website that will bring profit, and so you invest. Imagine paying like $200 to build a website for like amazon, in return getting 2% profit that happened’s from that website? That is a good investment.

The only issues i found in this idea:

What if companies take the money and run
What if the programmer fail to maintain the website

What are your thoughts on this?


#2

Let me ask you this, what’s the incentive to buy a project to work on? What’s the guarantee that this site I build returns a decent profit over the 10 year period? Is there an initial flat fee for completing the project itself? Or is all my income hinged on the 2%?

Also, why wouldn’t I just contact the company directly that wants the website and cut out the middleman so I receive 100% of what they’re looking to spend for the project PLUS if they want to hire me on to maintain it now I’m earning regular income (or on an as needed basis) as their webmaster.

I’d say there’s a high level of risk for the developer otherwise. While a website might look really successful on paper it all comes down to how it actually performs.

I see where you’re coming from here. But that’s where contracts in general come it, they safeguard a client not paying you and you not supplying the product the client pays for. Also, it’s really up to the company looking to hire a developer/designer to do their research. Buyer beware and all that.

If you want, flesh out the business model. Take the idea and run through scenarios from all sides of the business (the freelancer, the client company, and the company that runs this brokering website) is everyone guaranteed to profit in all scenarios? If not, what can you put into place to prevent this? How would you cover all parties involved?


#3

The whole point of the idea was to make sure the websites being made were so good that they would spend money to make them, as a investment for profit.

What if it is a small company and you just want to make there website, leave and just maintain it once and a while. I thought this was a good idea just to funnel all the people looking for websites w/ the people making them. When there is a middle man involved it keeps everything in order. That middleman can control both sides to keep up to there agreement.

The only fee is the one used to buy the contract. There also would special agreements you could make with the company itself.


#4

It’s an interesting idea, but I have some of the same concerns that dlyons has.

The other problem is that it requires the developer (the employee) to pay for the “privilege” of working. It also assumes that if the company makes money, that it will be honest about it. And is anyone else required to do this? Does the accountant pay for the privilege of doing the books? What about the electrician that wires the building?

Plus, most new companies fail. As the coder do I get a veto on their bad business practices since that will have the greatest effect on whether or not I get paid?

And a lot of companies (startups) do give a percentage of the profits. A lot of startups offer equity in the companies. If you look on sites like angel.co, you’ll find a lot of them. Many of the companies offer equity. A few offer equity but no money, but not many.

I think the “slightly reduced salary with a little equity” is a much more common approach. But you are trying not just no salary, you are trying to push negative salary.

I like that you are trying to think of new ways to do things. I just don’t think this one is going to work out the way you think.


#5

Well i never i said i was going to make it, just wanted to see what people think.

I just wanted a way to funnel people who want websites and want to build them together. Most new companies fail as you said, so that is why you need to invest. You need to make sure you end up with a profit. It was a way to sort out bad programmers from good ones.

Anyways i think the whole idea wasn’t bad, but wasn’t good. I never had the skills to make it in the first place though. Maybe something like this will exist in 20 years, maybe 10.


#6

I don’t think the most new companies fail because of a lack of investing or a bad website.


#7

That’s pretty much every project bidding site like Freelancer/Elance/Upwork.

And no it’s not a bad idea at all I think what @kevinSmith and I are trying to discuss is just the perceivable downsides. There’s just too much risk for all the effort and time a developer would have to put in for just the possibility of a profit.

Think of it like making a movie. Now an actor can totally add a clause to their contract that they’ll get a percentage of the movie’s profits. But that’s not the only income they receive for it. They still get paid to show up and act.

Look at the Justice League movie, you’d think a film we’ve been waiting for forever would do exceptionally well, in fact people where banking on it doing well, but it did poorly. Imagine as an actor you only received a percent of its total profits for that.

If a system like your proposing is to work, there needs to have two parts, the developer gets paid a fee for doing the project and then a profit percentage after everything is said and done.


#8

Yeah, sorry if I come across as overly critical. I’m just really good at playing the Devil’s advocate.


#9

I don’t think this would be valuable to developers nor the client. Definitely can see average joes/janes taking advantage of skilled labor for pennies on the dollar.


#10

Yeah, maybe I’m jaded as a musician, but there are always people trying to convince us to do our job for free, let alone pay for the privilege.

The other problem is that if I as a developer really, really wanted to invest in this company by paying for the privilege of writing their website in the hopes of future profits, then that would be an investment. OK, investments can be good. But before I invest $10k and triple that in terms of work, I would need to do the same due diligence I would want to do if I were investing in any company. That would be especially difficult with a startup. Do I have the time or the expertise to look over their business proposal, their business model, investigate their key employees, check their books, etc.? Even the professionals have a hard time picking the winners, I’m not sure I could.

But you’re welcome to try. Like I said, there are a few startups on angel.co that want people for no salary, just some equity. There, I just saved you $10k. :wink:


#11

One more thought: Most companies with really, really, really good ideas get investors and early clients. In the marketplace of ideas, money tends to find good ideas. Most of startups that can’t afford to pay anyone anything (let alone ask people to pay) are either extremely new, or are of questionable value. There are exceptions of course, but the odds are against it.

If you’re coming in at the “we don’t have any money yet” stage, then you should make sure that you are a founding member and get a percentage of the company. And you’d better be sure that you have absolute confidence in the product and its ability to compete.


#12

That reminds me of the people I’ve seen wanting websites that won’t pay you but will “spread your name around because exposure is just as good as money in your pocket” :rofl: I mean don’t get me wrong networking and word of mouth is huge but, you can’t buy a cheeseburger with it.

It’s also one of the biggest problems I have with bidding for work sites. It’s not everyone, but you do fine quite a few clients selecting the lowest cost bidder regardless of their quality of work. Granted, those are also the clients you should stay far far away from. But when you’re starting out it’s a real slap in the face. Web development and design have come a long way but I still think people devalue it.


#13

Yeah, musicians get a lot of “you should do it for the exposure” talk. Exposure doesn’t pay my rent.


#14

Well i didn’t see his post as overly critical, i saw it as the truth. I thought of this idea with little backbone of me wanting to do it. Maybe someone else will, i’m not sure.

You pay to build the bus terminal, and in return get a certain amount from the tickets sold on those buses. Then you care how good your bus terminal is, and care if the buses will earn you money.

Investing like this is always risky, but i was thinking cheap like 50 - $200 to build the website. Maybe instead you pay to build, and return you get stock? percentage of the company? If it fails than you could loose some money. Otherwise the company could buy back the percentage you own or try selling it. Maybe even transferring it into stocks somehow. Imagine owning even 0.1% of amazon. That would be worth 351 million.

jad·ed
/ˈjādəd/
adjective
tired, bored, or lacking enthusiasm, typically after having had too much of something.

Were you a musician before being a programmer?


#15

You pay to build the bus terminal, and in return get a certain amount from the tickets sold on those buses. Then you care how good your bus terminal is, and care if the buses will earn you money.

Yeah, but, to continue the analogy, I’ve never heard of a construction company paying for the privilege of building the terminal on the agreement of a percentage of future earnings.

Investing like this is always risky, but i was thinking cheap like 50 - $200 to build the website.

Yeah, but for most companies that is pocket change.

Maybe instead you pay to build, and return you get stock? percentage of the company?

That’s what I was talking about for equity. This is an example of a posting on Angel:

Staff Backend Software Engineer $0K – $1K · 0.01% – 1.0%
Full Time · San Francisco · Software Engineer · Python · Java · Ruby · Programming: 3P APIs & Libraries · Backend Development · API

They are offering $0-$1k and .01%-1% of the company. Presumably if you took the $0k salary, you would own 1% of the company. If that company turns into Facebook, you are a billionaire. But the vast majority of companies won’t do that. Maybe it will turn into a nice stream of income. Maybe the company will be bought out and you’ll get 1% of the $100M buyout. There’s also a real chance that you’ll get nothing when the company folds.

If I was young, and I had confidence in the company, I might take that risk. But know that it is a gamble.

The other problem is that most of those companies are looking for really rock-solid people with a lot of experience because tiny mistakes and inefficiencies made now will cost them dearly in the future. Personally, I’d be a little suspicious of a company willing to take an untested bootcamp grad with no real world experience and make them their CTO or lead (possibly only) developer. Any developer position worth equity as a company founder is going to involve some hard core coding and knowledge. Anything that doesn’t isn’t going to be worth giving up equity for. That’s just the reality of the market.

jad·ed

Or other definitions, like MW:

made dull, apathetic, or cynical by experience or by having or seeing too much of something jaded network viewers jaded voters

As a musician, I’ve become “cynical by experience” of people (not necessarily you) trying to convince me to work for free. I’m sure it is a common experience of all freelancers. Maybe you haven’t experienced it yet. A lot of people are going to explain to you why it is in your best interest to work for free, usually as “exposure”. That and $2.05 will get you a cup of coffee.

Were you a musician before being a programmer?

I was a musician for a 5 years before being a semi-pro programmer for 6 years before being a musician/music teacher for 20 years before (now) trying to become a programmer again. Only boring lives follow a straight line. You can’t even imagine the twists and turns of my life. I’ve been homeless. I’ve eaten waffles on the beach with Charo. I’ve toured the world playing music. It’s been fun.


#16

Completely off topic here but…
…you mean cuchi cuchi Charo? That Charo?
Dude you’re like the Most Interesting Man in the World of programmers.


#17

Yes, that Charo. I was working on a cruise ship in Mexico, and the flyon singer (who was a big thing in Mexico, kind of the Mexican Wayne Newton) invited me to brunch at this beach-stand waffle place and guess who walked up.

I don’t know. I’m sure there are more interesting coders out there. But I am the most interesting me I know, and that’s good enough.


#18

Hey I don’t know of any other programmers that can say they had waffles on the beach with Charo, or worked on a cruise ship (I bet you got some stories there). So that by default is awesome.
I also really like the idea of striving to be the most interesting us we know.


#19

I think a better idea is doing something similar to MTurk and crowdsource the development of a website. You could have 5 different developers working dev “hits” or the smallest unit of code. Or you could have someone working just html or a module of css for a page.

Charge $1.00 or $0.50 a hit or a snippet of code. It would ease newer developers into a paid project and save the client money and time in the process.


#20

Who is charo?

Where do you teach music?

Whats equity? Like a percentage of a company?

I know working for free for exposure is bad, because if you look at viral one-hit wonders they always turn out broke.

I also joined in February of 2017. I feel as if i spend too much time on the projects. Sometimes doing them twice. Whats your best schedule?