I was getting set to publish a funny story about one of the dumbest ideas I’ve ever encountered, and I’ve encountered lots of dumb ideas in my day. Then I realized that, technically, I was covered by a non-disclosure agreement and couldn’t reveal the idea nor any of its funniest details, no matter how little chance there is of the originator ever bringing it to fruition.

It’s a shame I can’t talk about it, because as bad ideas go, this one had it all:

• It was faintly plausible — just reasonable enough to make you pause for a second to consider it
• The idea was actually not new at all, despite its originator firmly believing it was. That it had initially succeed 30 years ago (before flaming out) was held up as proof that it could work.
• It was technologically feasible, but only with a lot of effort and cost
• After the effort and cost, the maximum revenue it could have possibly generated was a few hundred dollars a month. (There were deep, intractable structural reasons why this was the case.)
• The “plan” for overcoming the paltry revenue ceiling was to scale the entire scheme beyond all logic. Since I can’t reveal anything about the deal, I’ll use an analogy: imagine you determined that a specialized phone booth could make, at maximum, $5 per hour, but that it cost $4.50 per hour to operate and the booth is only available for 11 hours a day (so, roughly a maximum $5.50 profit per day per phone booth). You also have a very limited geographical area where you’re allowed to install phone booths: say, ten city blocks. You figure out that need to make at least $10,000 a month to recoup your R&D costs over a reasonable amount of time, so you decide to install 6 phone booths every block. Perfect! Except that your unrealistic theoretical maximum assumed 100% utilization all the time, and the real average was much more likely to be around 10% for a single phone booth (which you’ve now diluted further by throwing a bunch of phone booths into the same area).
• It involved somebody getting involved in something they knew absolutely nothing about, but assumed it was simple anyway.

Damned NDA.

This entry was posted on Saturday, July 26th, 2008 at 6:34 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.