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  • Looking for some business advice

    updated 8 months, 2 weeks ago 0 Member · 1 Post
  • Charles

    October 27, 2019 at 9:17 am

    Hi, am looking for some advice on this, am into tech industry. I am thinking to come up with a product in market. However, there is a company with similar product already in the market. Now this company is ready to pay me X% per sale. First option that I have is to build our own product and launch it in market then spend money on promotion etc and drive revenue. In this investment is required for product development. It has high investment but reward is also high, risk is also high. Second option that I have is to simply promote/sale the other company’s product as a partner/affiliate and get X% commission on per sale. Here I don’t have to invest anything on product development however to promote or sale, funds would be required. Third option that I can think of is, to pursue second option (promote and make X% of profit on per sale) and eventually buy stake in company. However, this isn’t possible initially. To actually buy stake I would have to connect with founders and talk to them on this, if they are ready and amount is upto their expectations then only it would work and also I don’t have funds to buy stake in their company right away. As a businessman/entrepreneur what do you think, what’s the smart thing I can do here. Personally, I feel that risk to reward ratio is comparatively high in second option. I can go with second option and if everything works fine and I click with founders and have required funds at disposal I can bring this thing to them that am interested to buy stake in your company. Problems that I can think of with this second option is, what if I do incredibly well and after getting lots of clients from me they bring the commission % down or what if in future they shut partnership completely or simply don’t pay me? Experienced folks reading this, is there any legal contract to prevent this from happening? One more thing on which I would like to get advice is will you suggest to outsource a business’s core product development? For example sake, consider above product only. Suppose we go with the first option, we can outsource product development to any service based software company and launch product in market or we can build a dedicated team in house for this and start building the product. Pros and Cons of both: Pros of outsourcing – Product development cost would be comparatively less. – Since everything would be managed by them I won’t have any hassle of managing a dedicated team for this and taking care of their employees salaries. Cons of outsourcing – The biggest problem here is the risk, we would be getting our core business product developed by someone else. They would have entire codebase with them. Code of our core product, the product which will drive sales. What if they launch it themselves or do something stupid? Pros of developing in-house – No security risk as explained in outsourcing con. – Since it would be build in-house we won’t have to rely on any other company if we want to modify/expand functionality because our team would know of everything. Cons of developing in-house – High investment. – All the hassle of managing the team and working on go to market strategy at the same time. Need to take care of a lot of things. Please answer in a detailed manner so that I can understand the logic behind you picking up a particular option. Thanks. – by hq overview geeky_ninja – –

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