When Does a Good Idea Become a Start-Up?

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I was reading Om Malik’s post today on the increase in start-up action in the Valley and it got me thinking…when is the right time to start a start-up?  About 12 years ago I had a great idea.  Create a website where people register their holiday wish list (remember those letters to Santa) and share it with family or friends that ask the inevitable…what do you want for your birthday/Christmas/Hanukkah,question.  The site would then link to various e-commerce sites where they could buy online.  Remember, these were the days of the Pets.com sock puppet and when Amazon just sold books.  I was really excited about this idea because I hadn’t seen it anywhere yet.  But, I wasn’t in a place to do much about it.  I think the most I did was write an email to Yahoo! (remember when they were the leader?) with the idea and a pitch to hire me to lead it.  Of course that didn’t get anywhere and lo and behold, a few months later the Amazon Wish List debuted, along with their expansion way, way, way beyond books.

Since that time, I’ve never stopped thinking of ideas and wondering what I should do with them.  Rob Walling and Mike Taber from the Start ups for the Rest of Us podcast give us some stupid reasons to start a software company.  But when do you just dive in?

I have two ideas right now that I’d love to move on.  The first wouldn’t require a ton of upfront capital — just a good web designer, freelancer curators/writers, marketing (I can handle that), and eventually some sponsorship  sales (or bus dev with ad networks). BUT, it would be pretty easy for a portal to wrap into its portfolio.  Is that a good thing or a bad? Software companies hope to have enough IP and momentum to encourage an acquisition.  This model would be either easily replicated or I’d have to compete with a much bigger player.

The second idea involves a physical product plus a social community.  The community aspect is fairly simple but the physical product is not anything I’ve worked with before.  It would require product design, manufacturing, and sales to specialty retailers.  However, I think it is defensible and has a real market with revenues not based on chasing ad dollars.

So which do you do? Do you seek out the capital and make a life changing investment in pursuing option #2 or do you keep your day job and start up option #1 and see how it goes?  This is what I’ll be thinking about this weekend.  I’d love to hear from entrepreneurs what made you finally dive in head first and turn your idea into a start-up.

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