Who needs the money?
While most emerging high-tech companies require funding assistance to get started, this Boston Globe columnist, serial entrepreneur and Brazen Careerist blogger says you can launch simpler businesses on the cheap
Here’s some advice for all you on-the-fence Internet entrepreneurs: Forget about the whole funding problem. Forget about the business plan. The new buzzword on the Internet is Web 2.0. For you, what 2.0 means is that it costs next to nothing to launch a business, and you can succeed with no business experience. Sure, if you want a biotech patent to cure cancer, you need a lot of money. But you don’t need money to start an Internet company. You need faith and spunk and a good idea. And don’t worry so much about if it’ll work or not. You can just try it, since it won’t cost you any money. Guy Kawasaki, founder of Garage Ventures, says, “Don’t worry, be crappy.” Forget about being perfect or being right. Just get your company going and see what happens. And start-ups are not just for the young or the technical. They’re for everyone who has a problem no one’s solving. Look at Mayasmom.com. It’s for parents, and it’s a start-up, and you have to know a lot about being a parent to solve parent problems. Here are ten ways to get going with no money down:
- 1. Use web technology that’s free. In the first Internet boom, you needed to hire a technical team. Today technology for creating a web site is geared toward the poets rather than programmers. Anyone can learn to use it, and most of the software is free. 2. Don’t pay for marketing. Web 2.0 is about viral marketing and social media: Buzzwords for buzz. So launch your business, and send a bunch of emails to announce what you’ve done. If people aren’t interested, you know things aren’t working, and you should try something else. If things do work, start blogging – it’s a great marketing strategy and it’s free. 3. Use someone else’s distribution. Amazon allows you to set up your own shop using their products – Amazon’s warehouse is your warehouse. Other operations provide you the same service in more specialized markets. So, if you know you can sell to certain consumers online, these distribution models will allow you to be up and running without spending a dime. 4. You don’t need lawyers. Perhaps because Madison is a biotech hub, non-biotech companies feel they need to get patents before they launch. “In the software space the patent doesn’t matter as much as asking, ‘Can you sell this?’” says Teresa Esser, director of Wisconsin-based Silicon Pastures. For those of you who do need lawyers, many Silicon Valley law firms will work for free for a start-up. (YouTube didn’t pay legal fees until they’d used more than two hundred thousand dollars’ worth of their lawyer’s time.) Tell this to your Madison-based lawyer: Peer pressure. 5. Jump on the trend of starting micro-ISPs. These companies sell one or two very small software programs. For example, a guy (yes, it’s usually a guy) writes a program to make Outlook sort e-mail differently, and then sells it to a specialized market from his own Web site. This is a great kind of business to start at home while you have a full-time day job. 6. Get free content from users. Web 2.0 is about user-generated content, as in lots of people post stuff and you package it and sell it to advertisers. At the highest level this is Yahoo, indexing the pages you write and selling search results at auction. On a smaller level, Reddit is a company that lets people vote for the information they like. (And by the way, two college kids founded Reddit with twelve thousand dollars. They sold the company to Wired magazine two years later for millions of dollars.) 7. Think no overhead: This is the age of the virtual office. You already have a cell phone and a computer. That’s all you need for your business. You can run your company from your extra bedroom, your dorm room, or off your laptop from your favorite coffee shop. No one can tell how big you are from your home page. 8. Think quantity not quality. You can start and sell a web business every month or two. There are more than seventy-five liquid markets online that run twenty-four hours a day, where people buy and sell websites. Ben Bleikamp started two websites from his dorm room and sold them within months. New Concept Factory is a business that starts twenty-four Internet companies a year and flips most of them. 9. Think small. If you accept funding, you’re formally announcing that you’re going to grow a company large enough to bring in money not only for you, but for your investors. Ask yourself why you’d aim so big when you really only need to generate enough money for yourself. Is it possible to launch your business on a smaller scale, with no extra money? Consider that. If you want to work for yourself, stay small. If you want to work for someone else, take in a big chunk of cash and give up board seats right and left. 10. Redefine success for yourself. Building Microsoft is out, and building micro companies is in. You don’t need to own the world in order to enjoy it. First, figure out the life you want to live, on a daily basis, and then create a company that can give you that lifestyle. Entrepreneurship is a lifestyle choice. As your personal needs change, you can get out of your company and start another that’s more appropriate to where you are. Entrepreneurial success is no longer defined by who earns the most at the end of the day or at the end of a lifetime. Success is about having the life you want.
|Madison Magazine - January 2007|