Actually, I think I would have each one start with radomized gear. That way each time you play it's a unique experience right from the beginning.

Sure they will also be players that will restart until they get the item they want, but I believe if you limit the possible starting gear and if each item on it's own is just a small step to survival then it will work.

Go off the idea of using a point system to "purchase" these items and just have a random generator "buy" the items until there either are no items left or you run out of points to spend.

Make it a start of game decision (difficulty level).

Hardcore players will go for the "undies only" mode, whereas newcomers playing their couple first attempts might go for "I came here intentionally with my BBQ and M16A2"

Note: Make sure they don't end up playing on the same server though :P

I'd let players choose their own starting gear, and the skills they're allowed to use well.

For instance you could forgo marksmanship(% less accuracy) and starting with a gun, to spend in a bunch of other skills

Where as starting with a gun you'll end up being forced to choose being able to heal yourself less efficiently, more likely to get sick from "wild water", spawning somewhere inconvenient, and similar.

An alternate suggestion:

If you want to foster interaction between players, have players start with an overabundance of one thing and little of anything else. You could do it randomly, or have the players select from a given loadout. If you give players stuff that is worth trading (or worth killing for), they will naturally seek to interact more.

I'm assuming that gear with determine abilities, like you can't whittle a point on a stick unless you have a cutting tool, so starting with a knife will save you the hassle of knapping a stone into a crude blade (or an awesome blade, if the PBS documentaries I watch know anything about master-level stone tools).

You say there will be perma-death, but will the client/account/whatever track achievements in the past? Just like the new Starcraft automatically sends your workers to mine, maybe a thousand repetitions of the first twelve seconds of the game would allow you to skip those chores. Say I spawn in with just the clothes on my back. After fifty tries or so, I'm going to have certain elements locked down, like finding tinder or a walking stick. Have a tracker for the number of times mundane tasks have been completed--"Made a walking stick within five minutes of spawn: 23/50"--and when the criterion is met, just let the guy spawn in with a walking stick. You know he's able to get one, why waste his time? He'll never not be able to get one.

Of course, you have to qualify it, so a super-dedicated player can't spawn with an Iron Man suit and a Ferrari, but taking away some of the entry-level chores and letting a player get back to work being awesome (or catching Cholera, whatever) would be a nice reward for past successes and take some of the sting out of permadeath.

You could even balance it further by employing a "point" system. Like Waterlimon said, a character who had time to prepare would have a wildly different kit than one who was caught with his pants down. How about a system that lets players pick a few items from a list, spending points to build their kit. A book of paper matches is cheaper than a butane lighter, a box cutter is cheaper than a survival knife, and if you want that survival knife you have to accrue credit through in-game effort, since not everyone has a freaking Rambo knife laying around. I might spend my points on some spam and a canteen (old Dasani bottle if I want to save a couple points) and mandals, but once I've got my act together and know how to get food, I can stop bringing the spam and spend those point to upgrade my footwear to a closed-toe hiking shoe. Once you get awesome at survival, you can spend all your points to start with an unlockable canoe and play the game in a totally different way, hard-mode with water travel.

You could even use the unlock system as an incentive to the players. Say you can only get certain unlocks if you start in a more austere way. Yeah, you can spawn with a .22 rifle and fifty rimfire cartridges, but just like playing GoldenEye with cheats enabled, you won't get any credit toward further unlocks while you're in easy mode. If you start naked, you get a difficulty bonus and mad props for being a true woodsman. If you split the difference and start with a cargo vest and a hatchet, then you can accrue credit towards achievements in a normal way.

I really like your idea, and I'm hoping the project moves forward so I can hear more about it. Have you given any thought to the tools and restrictions regarding inter-player communication? It's been a worm in my brain lately, and I'm on the lookout for views.

If you randomly decide to give them items, do take care to ensure that even if they started out with zero items, they could still survive. Sort of like the game Sweet Home, where each of the five characters has a unique item that allows them to overcome obstacles, but if they die, you will be encumbered with having to find and hold an item that does the same task. The point it, the player should be able to find a substitute for everything he does not start with, and ideally, starting with a different set of items should save you roughly the same amount of time, even if you get an item that helps immensely, but as a result, you have to find a replacement for an item that is hard to find, but essential.