[DanielBMarkham]

It definitely has all the initial attributes: clear market niche, mature market with room for innovation, users willing to trade value for money.

You could do some really cool stuff, like a hardware box for train control that has wi-fi, OLED, and a web server. Combined with some custom equipment, like the engine/webcam idea or others and it could be a killer app/platform.

On the down-side, you need to be really close to the customers, you need to know what sells and what doesn't, and you need tight and immediate feedback as you try new ideas. You also need a way to communicate to lots of them at the same time -- repeatedly.

I think it's a great startup idea. I'd be concerned about those challenges though. The best situation would be to launch as part of a partnership with well-trafficked, locally-run hobby stores. Perhaps with the cooperation/endorsement of a large hobbiest club and good press from the model train magazines.

I don't think any of that is cheap or easy, but there's always obstacles.

[eru]

Thanks for the analysis.

The webcam idea may make it viral. Perhaps you can even implement controlling the trains via the net, so that you get a kind of train simulation. Though you would have to be in touch with customers to see if this is an idea that sells.

[DanielBMarkham]

We're thinking along the same lines.

Would I want to surf home from work and play with my train set? Both as a switchboard operator and as a virtual engineer/passenger? Would I want my friends to share in this experience with me? Running other trains, or coming along for the ride? Making movies of the experiences?

Heck yes. I'd even want a link into FaceBook where people could tell what's going on in my model world in case they wanted to join in.

Model trains are virtual worlds. The more you can make it like a complete MMORPG with social hooks the more viral it becomes (in my opinion)

[eru]

My kid might even put an obstacle on the real model railroad and you'd have to brake the train via the web to avoid a crash.