How much risk am I taking on? Is this worth it?
A pre-project breakdown of the numbers.
Aka, How much risk am I taking on? Is this worth it?
Let’s break it down like this…
The market, for simplicity sake, produces $100,000 annually as the current Total Addressable Market.
M&W’s 2 shops drive about $5,000. (Let’s assume they’ll sign.)
43%* chance of failure to deliver because…
1) I may not understand the problems like I think I do.
Not too likely because I studied ‘em for 4 months before acting.
2) I may underestimate the technical complexity.
While, no question I will overlook plenty of complexity at first glance — a lock, in fact — I doubt this will happen because my anger at my losses will not let me get deterred. Plus, a win for me is a win for M&W’s shops.
Having these points of alignment is a magical fuel to get me through doldrums. Entrepreneurs frequently need to pull magic out of thin air to keep moving forward, and I collect these whenever possible.
So, this leaves a 57% chance to make $5k ARR.
And this won’t be true until full product delivery, so revenue for 2018 cannot even climb to $5,000.
Okay. Let’s go with a likely 2018 revenue of, oh, $1,500.
That ain’t much for a whole bunch of risk.
Is it worth it? Can’t tell yet. If it takes one minute to build, sure is.
I will just bet, though, creating a compliance service from scratch, solo and full-stack, with at least one major new point of ignorance will take a tad longer than one minute to build.