Posts Tagged ‘start up’

Bootstrapping Technology Businesses

Monday, September 7th, 2009

In this climate it is harder to get investment as a start-up company without a track record, but that does not mean that there are not opportunities.

The Internet has matured a lot in the last 4-5 years meaning you can get your idea developed a lot quicker and more cheaply using languages such as Django and Rails. Once you got your prototype launched the hard work begins and it takes a lot of work to make an Internet business successful. The great news is that it does not cost a lot of money to run and promote your technology business. You have to be smart, make good use of the tools that are available and be prepared to bootstrap.

What is bootstrapping?

Bootstrapping is starting a business without external finance; you fund your business through your own savings, internal cashflow and most importantly by being cautious with your expenses. You do not hire plush offices until you can afford them (actually I don’t think there is a need for plush offices unless you need to entertain clients a lot), you do not pay yourself a big salary until you can afford it. Every time you spend money on something non-operating items you are potentially reducing your business growth.

How can it help you?

I think that bootstrapping is under-rated as it is not glamorous and could mean that it takes a bit longer to grow your business, but the upside is that when you try to raise finance you will have a profitable business and working prototype with real customers. As an investor it would be very central to my decision to see that the money invested in a business will be put to growing the business and not wasted on luxuries.

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Start Up Business Philosophy

Sunday, March 1st, 2009

The philosophy of a web start up company is extremely important, and I think this should be set before you even start coding. I believe in lean, agile, pragmatic approach to business and this is reflected in the core philosophies of the venture:

Lean and mean, bootstrapping
No lavish offices, no expensive staff, everyone works remotely and keeps costs to a minimum.

Agile
Keep steering the ship, fast and agile. Less documentation and more prototypes, less guessing and more testing.

Revenue from day one
If there is no revenue strategy, or business model then it is not a business.

Features first scaling later
Think about the killer features that your customers want and need, worry about scaling later, prove the concept first.

Release early and quickly
Your product will never be perfect and it will never be ready, so just accept that and release. As soon as it is being used by real customers you will have to change it anyway.

Involve customers before the product is built
As developers we are always guessing what our customers want, so why not ask them. I like to build a wireframe of the site and involve customers when testing it.

Guerilla marketing
Clear brand message, be known as the best in one area, and customers will come to you.

Sound business principles
Prudent financial strategy, at least six months operating cash in the bank before profits are taken from the business.

Focus on businesses not consumers
Several web apps I have built have focused on end consumers and trying to get them to pay is almost impossible. Businesses are much more likely to pay for services if you can add value to them or save them money.

Fun and excitement
Make sure you are passionate about what you are building, and that you have fun working on it.

Part time work
This might be a contentious one, but until the business is making a profit then work on it in your spare time. 10-15 hours a week is enough time to build a web app in a few months.

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