Capital efficiency is certainly important whether you are a HW or SW startup. I'm curious about your comment that "the financial types would never accept the business plans". One of the important features of running a project like a startup is staged financing. First you get $10,000 to explore the needs. If everyone says, "Yes, I'd like something like that," you get $50,000 to build a minimum viable product (something just good enough for an enthusiastic customer to get value from). Then you scale from there. There is never a "business plan" per se, not until you have some data. I'd have the finance types write the business plan once you'd sold a few copies of whatever it is you were planning on making. At least, that's what I think I'd do given that I know almost nothing about your situation :-)
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It kind of worked like you're describing except that there was very little actual money. In some cases we'd get $10K but most of the time the support was in the form of a tacit agreement to let us work maybe 4-8 hrs/week on a side project and use resources we already had from our day jobs. Once the project was accepted into the funnel, based on a prototype of some sort, you had to come up with a business plan and present the whole thing to a board. The problem was that at our site there were very few actual business people with spare bandwidth so the plans written up by engineers were met with scepticism.
This is probably not unlike what actual startups run into, even after the lessons from the dot-com bust: there's a lot of enthusiasm around the technical ideas but it's hard to convince investors.