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Businesses The Almighty Buck

Bootstrapping Start-ups 285

Posted by michael from the he-travels-the-fastest-who-travels-alone dept.
An anonymous reader writes "How many of us wanted to follow our dream and start our own start-up? How many of us thought that it can't be done due to costs, the need of big bucks and convincing some snotty VC? Well it didn't stop these guys. The most current success story is social networking software Huminity which has been on /. before. The recipe for their success was: open source, clustering $100/mo servers, using the web to find native translators instead of using over priced local ones and hiring GUI designers from popular skins download sites."
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Bootstrapping Start-ups More

Bootstrapping Start-ups

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  • Shame they didn't have someone design their site (Score:5, Funny)

    by cosmo7 ( 325616 ) on Tuesday December 02, 2003 @02:17PM (#7610554) Homepage
    Argh my eyes! They're still blinking!
    • Problem solved: it's been slashdotted into oblivion!

    • no kidding,

      The recipe for their success was: open source, clustering $100/mo servers, using the web to find native translators instead of using over priced local ones and hiring GUI designers from popular skins download sites.

      With all the money they saved maybe they should hire somebody to do these things.

      And for the love of god, make your page have scroll bars! I'm in Galeon, and the only way I could scroll through the mirrors was by click-dragging my mouse to highlight things. Very annoying.
      • Given that they hire their GUI designers from popular skins download sites, they probably did have their 'experts' design their website too.

        Aren't flashy skins good UI???

  • Only problem... (Score:5, Interesting)

    by swordboy ( 472941 ) on Tuesday December 02, 2003 @02:17PM (#7610556) Journal
    I have several ideas that could make great money but they ultimately require money to make money. Does anyone have a good suggestion for raising capital without forfeiting the rights to one's intellectual property?

    • Re:Only problem... (Score:5, Funny)

      by Fulcrum of Evil ( 560260 ) on Tuesday December 02, 2003 @02:19PM (#7610571)

      Does anyone have a good suggestion for raising capital without forfeiting the rights to one's intellectual property?

      I believe the typical strategy is to run up your credit cards, mortgage your house, and borrow from relatives.

      • Re:Only problem... (Score:2, Insightful)

        by Anonymous Coward
        I'm a co-owner of a small business and we worried about that. I've had a lot of conversations with other small business owners who had similar concerns. My overwhelming impression is that, if we're smart enough to have a good idea, plenty of other people have as well. Making a business go is a lot of work, and maybe nobody else is inclined to invest that amount of effort into it.

        If you're worried about a larger entity, one with resources, taking your idea and running with it, remember that size often ha

      • Re:Only problem... (Score:5, Interesting)

        by Restil ( 31903 ) on Tuesday December 02, 2003 @03:32PM (#7611155) Homepage
        Odd that it was moderated funny. These ARE the conventional ways that most small businesses are funded. And don't forget that most of the founders work another job to put food on the table while the new business churns along for at least 3 years before pulling a profit. And 4 times out of 5, these new businesses will fail. BUT... if you succeed, and you pay off your startup debts, you owe no favors to anyone, contractual or otherwise. That's the tradeoff.

        -Restil

        • How it works (Score:5, Insightful)

          by soloport ( 312487 ) on Tuesday December 02, 2003 @05:42PM (#7612389) Homepage
          Yes, you may have to run up credit cards and eat bread & water for months, but here's what's really important: Customers

          Every single work day, dedicate 9:30 - 11:30 AM to nothing but cold calls [ok, I hear your moaning...] Or have your S.O. do it -- if s/he has a less threatening voice.

          Google "cold calling" and learn the best techniques, on-line -- they do work. Do calls every day! Fill out a spreadsheet with who you're going to call the next day and, just like successful aerobics, get up in the morning and do it without thinking about it. Use a similar spreadsheet to track who you've called and call again the next month. And the month after that.

          Eventually, you'll turn those calls into appointments, you'll turn the appointments into sales, and you'll turn the sales into (life-long?) clients. Eventually you'll be paying all your bills, on time. Eventually you'll be paying down your debt and even saving a little for retirement. Eventually, you'll be eating out in style, again. Eventually, you will not need to do any cold calling!

          We do about 20 calls a day, and a day doesn't go by that I don't get at least one appointment. Sometimes it's someone who's rather friendly or curious. So I go the next day and introduce myself in person and ask a slew of questions about their business. I don't tell them anything about mine unless they ask -- then I keep it to just one sentence worth of info. and get back to them.

          After about 4-6 "appointments", I make a sale. If I do a great job the first time, the first sale can lead to many, many more. A client tends to return to the one person s/he knows. They rarely let another geek into their sphere, unless there's a good reason.

          I also think it's good to "spread the wealth". So for other geeks I trust with my clients, I throw work their way as much as possible. Clients like to know there's a "hit-by-truck" backup for your services.

          Remember how hard your first real job was in IT? Took you a while to get to real "success", right? This is no difference, except you're having to sell to several "bosses" instead of just one [cheap, lying, no-good, rotten, four-flushing, low-life, snake-licking, dirt-eating, inbred, overstuffed, ignorant, blood-sucking, dog-kissing, brainless, dickless, hopeless, heartless, fat-assed, bug-eyed, stiff-legged, spineless, worm-headed sack of monkey shit] Holy shit! Where's the Tylenol...

      • I recently took a new products development class as part of my MS Management of Technology degree (shameless plug: UNH MS MOT [uvm.edu]) and what the above poster described is mostly true. Other sources of funding include:

        Government grants (Matt-Lesko-style)

        Government small business loans (these are largely the reason for Subway's growth since franchisee's typically take one out to open a Subway.)

        Your Rich Uncle

        An angel investor. An angel investor typically will invest in early-stage companies to help them g

    • All the normal ways you raise money:

      Loan
      Job
      Lotto

      VC is just a loan that you pay back with stock/IP. If its a good idea, you'll make so much that you won't mind giving a chunk (and maybe a large chunk) to someone else.

      I'm heavily invested in Lotto myself.

      • Re:Only problem... (Score:3, Informative)

        by johnnyb ( 4816 )
        "VC is just a loan that you pay back with stock/IP"

        Actually, equity financing is very different from loans. Basically, with loans if your business fails you still owe the money. With equity financing if your business fails you don't owe anything.

        I'm not a big fan of debt. Equity financing, however, is an excellent way of doing things.
    • I have several ideas that could make great money but they ultimately require money to make money.
      Me too:

      1. Get several million dollars for capital.
      2. Deposit in savings accounts.
      3. Wait for interest to accumulate.
      4. Return initial millions.
      5. Profit!

      Easy as pie, and 100% guaranteed to turn a profit each and every time. Any investors?

    • Drugs! (Score:3, Funny)

      by MarcQuadra ( 129430 ) *
      Go more than 500 miles away, make friends with local druggies, move up the chain, gain their trust. Do little deals for a while until you have the capital to pull a big one, rip off the supplier, move back home (or better yet, elsewhere) and sell off your stolen drugs while holding your ill-gained cash. Most mid-level pot/coke dealers aren't nearly as tough as they seem, they aren't going to go more than 500 miles out of their way to recoup under $5,000.

      • Re:Drugs! (Score:5, Funny)

        by the_mad_poster ( 640772 ) <shattoc@adelphia.com> on Tuesday December 02, 2003 @03:08PM (#7610983) Homepage Journal

        Most mid-level pot/coke dealers aren't nearly as tough as they seem, they aren't going to go more than 500 miles out of their way to recoup under $5,000.

        I can't help but think that there's really only one way to learn this sort of thing...

      • Re:Drugs! (Score:2, Funny)

        by Anonymous Coward
        "Most mid-level pot/coke dealers aren't nearly as tough as they seem, they aren't going to go more than 500 miles out of their way to recoup under $5,000"

        Actually, we're tougher than you think, and thanks to your posting (and kind listing of where you live and who you work for), we know exactly where to find you.
        See you soon, dumbass.

        P.S. Some dude "99" contacted me. He wants to tag along and have a few words with you.

    • Yes (Re:Only problem... (Score:5, Informative)

      by dmorin ( 25609 ) <dmorin@@@gmail...com> on Tuesday December 02, 2003 @02:41PM (#7610749) Homepage Journal
      • Sketch out a business plan that gives you some clue of how much money you really need. Hint, you do not need a million dollars.
      • Pretend you're optimizing code and shrink the hell out of it. You don't need to pay for a hosting service above and beyond your cable modem in the basement. You don't need brand new machines when you can buy from ebay. You don't need an office, or business cards, or a travel budget. You don't need to hire person X if you can convince them to do it for free for version 1. Repeat ad nauseam.
      • Go out and get the stupid money. Ask relatives. Rack up credit card debt. Tell them you're making an independent film or something. Move back in with your parents if you have to.
      • Get customers. You may even find yourself a sugar daddy that likes your idea so much that they will pay up front, enabling you to do more sooner. This is how many startups get started, when a big company says "I am willing to be your only customer for awhile, even though I know you have no product, and I will pay you to build it, on the promise that I will get lots of profit once you really do have product."
      It's been done plenty of times before. It's not inconceivable once you have a better handle on how much you need. Everybody thinks they need a million dollars to start, but in reality you can probably get started for a few hundred or a few thousand. And if your idea has any legs, then raising a few thousand bucks should not be out of the realm of possibility.

      • Everybody thinks they need a million dollars to start, but in reality you can probably get started for a few hundred or a few thousand.

        It really depends on your idea. Some ideas can be implemented for $0. Others might take thousands, others will take tens or hundreds of thousands. Some ideas could take billions or trillions. They all might be ultimately profitable, but some have high startup costs, and some don't. It depends on the nature of the idea.

        • Re:Yes (Re:Only problem... (Score:5, Insightful)

          by dmorin ( 25609 ) <dmorin@@@gmail...com> on Tuesday December 02, 2003 @03:08PM (#7610982) Homepage Journal
          Possibly true, but not useful thinking, because that causes everybody to assume that their idea will take a million dollars.

          I've long held the theory that although everybody (well, every geek) wants to run a startup, most of us are either too scared or lazy to do it and just in incredible denial. So while planning our startup we are on the lookout for the first insurmountable obstacle that we can point to and say "Woop, oh well, guess this can't happen." The easiest has always been "I need more money than I have", followed rapidly by things like "I need more time" and "I'll probably get crushed by the big players if I even attempt it."

          Geeks are incredible realists, which often means incredible cynics. If we can predict a gray area in the future of our plans, a spot where things might not work out, it is very difficult to ignore it. That is why it is often a good idea to team with a real business-minded entrepreneur who just plain does not think that way. They make a great pair. Engineer says why something will break, entrepreneur says why it does not matter.

          I have a good friend who is definitely more salesman than geek. I told him an idea. His response was, "I know right now who I could sell that to, if you can make it." But to me, the idea of "Will this sell?" was one of those gray areas that could easily be insurmountable -- assume it will not, therefore halt. But other personalities do not see it that way.

          • But along the same lines, those who see it as possible often can't sell the idea, and you are usually the one that spent the most energy and (in a lot of cases) could-have-been-billing-for-it time on the project, and you end up nowhere.

            Not that ending up nowhere is necessarily bad, but it's definitely a downer after a lot of hard work.

          • Possibly true, but not useful thinking, because that causes everybody to assume that their idea will take a million dollars.

            Anyone that stupid will soon be departed from their money anyhow. This thinking comes from the fact that a million dollars is pretty much the minimum you need to make a decent return without doing any real work.

            I've long held the theory that although everybody (well, every geek) wants to run a startup, most of us are either too scared or lazy to do it and just in incredible denia

            • The thing is, that's basically the case. Starting a business is very risky. Most people can't afford to take that risk. And big business just makes things even worse. The barriers to entry of the vast majority of already established businesses are insurmountable to most. If you have a unique idea or perfect timing you can eliminate a lot of these barriers, but for the most part, it takes money to make money.

              The interesting thing to me is that although we're talking "startup", how many people in the convers

    • Re:Only problem... (Score:3, Interesting)

      by artemis67 ( 93453 )
      I have several ideas that could make great money but they ultimately require money to make money. Does anyone have a good suggestion for raising capital without forfeiting the rights to one's intellectual property?

      I'd say don't get greedy. Yes, bringing investors on board requires giving up control. But with that money generally comes a wealth of business management experience that you may be lacking.

      If your idea is good enough to get the right investors interested, then I guarantee you can go a lot fart
    • Patents are the best way to protect your IP while trying to sell ideas. Find a patentable idea, outlay to patent it, then you have a solid basis to try and and sell it/licence it.

  • And now... (Score:5, Funny)

    by BMonger ( 68213 ) on Tuesday December 02, 2003 @02:17PM (#7610558)
    ... their bandwidth costs have forced them to close down.

  • i have a startup (Score:4, Funny)

    by Anonymous Coward on Tuesday December 02, 2003 @02:17PM (#7610559)
    and i am the only employee/CEO of the company....browse pr0n all day. haven't figured out how to get somebody to pay me for it though

  • From the article: (Score:4, Funny)

    by Steve 'Rim' Jobs ( 728708 ) on Tuesday December 02, 2003 @02:18PM (#7610564) Journal
    There are no more angels willing to invest hundreds of thousands of dollars.

    Sure, if by angels you mean idiots.

  • What's the deal? (Score:5, Insightful)

    by CommieBozo ( 617132 ) on Tuesday December 02, 2003 @02:23PM (#7610628) Journal
    I don't get it. What's a startup? This Huminininity place is a startup? It's two guys with some weird software and a terrible web page with no bandwidth.

    What is their business model? Selling people t-shirts while they use the software for free?

    I'm one guy. I also sell t-shirts and give away software. I'm a startup too!

    • Re:What's the deal? (Score:4, Interesting)

      by BrynM ( 217883 ) * on Tuesday December 02, 2003 @02:33PM (#7610700) Homepage Journal
      Exactly what I was thinking. My bet is that, once their software becomes popular, they will start charging for it a la DIVX and other "rope 'em in while it's free" business models. They are in the "initial hype" portion of the business model - posting on /., magazine and trade publication articles, selling shirts... making it look cool. Next is the "widen user base" portion where you start seeing the app bundled with everything under the sun from magazines to new machines. Finally, they will come to the "cash in" portion where they either make it spy/adware or just notify everyone that on such-and-such date, the product will no longer work without a one-time/monthly/annual fee.

      The software actually looks kinda cool, but I'll be damned if another person/company/weasel takes me in and switches to a fee based product midstream. It's sad that I've seen enough of this happen to smell it coming now.

      • Or they could get 10 million users signed up during their 'perpetual free beta' and sell the whole dang thing to AOL or Microsoft. Worked for ICQ, to the tune of ... like $400M.

    • Re:What's the deal? (Score:2, Informative)

      by DukeyToo ( 681226 )
      The license agreement states it is "LIMITED TIME FREE SOFTWARE" (or something like that). They have left the door open to charging at a later stage.

      The rest of the license agreement is somewhat hard to read, due to a lack of headings and an abundance of lawyer-speak.

      I'm not sure that their business model makes much sense though - I expect that at this stage of the game it will be too hard to grab a good share of the IM market, especially with only the one distinguishing feature, and no message encryption

  • 100/mo on servers (Score:4, Funny)

    by DaneelGiskard ( 222145 ) on Tuesday December 02, 2003 @02:25PM (#7610642) Homepage
    Hey...saving bucks on the servers / connection surely "pays off" now ;P

  • Fedbiz (Score:5, Insightful)

    by blogboy ( 638908 ) on Tuesday December 02, 2003 @02:26PM (#7610649)
    If you're a start up, like me, do not, repeat, *do not* make the government your first contract. They will bleed you dry with all the waiting due to red tape and politics.

    I now understand the $700 toilet seat:

    * $5.95 for materials
    * $694.05 for overhead

    Completely justified IMHO

    • Re:Fedbiz (Score:3, Informative)

      by EvilTwinSkippy ( 112490 )
      Small Businesses and Non-Profits are like that too.

      I do remember being hired for the Army to code a website, and no seeing a paycheck for 4 months. Not only did I have to get through that Army's red tape, I had to go through the University's who had subcontracted the job out to me's red-tape.

      Now one advantage I have running a business on the side is the ability to exploit the uber-long lead time on projects. I had a coffee shop that took 4 months to figure out what they wanted, and a professional organi

    • The $700.00 toilet seat... (Score:4, Informative)

      by djh101010 ( 656795 ) on Tuesday December 02, 2003 @02:56PM (#7610876) Homepage Journal
      ...was an entire inside wall of a compartment from an airplane, with an integrated toilet seat. It's held up as an example of wasteful government spending, but it's not as represented. I'd expect the hundred-dollar-hammer and similar stories probably have similar truths behind them.

      Not saying governments don't waste our money, but this one just plain is misrepresented.
      • I'd expect the hundred-dollar-hammer and similar stories probably have similar truths behind them.

        Yes, it does:

        http://www.govexec.com/dailyfed/1298/120798t1.htm [govexec.com]
      • there are $100 hammers out there. W/ the heads made of titanium, they're extremely light. you can pound nails all day and not have a sore/tired arm after the first 5 min.

        http://www.dajosales.com/titham14ozwo.html [dajosales.com]
      • I worked for a label company at one point. By "label", I mean stickers. This company made stickers that you'd put on lawnmowers (Do not put your hands in here, dumbass), cars (the dashboard overlay with the speedo & such), planes (the "Please fasten seat belt" overlays), and everything in between. I was an account manager. The gov't regularly paid $80+ PER STICKER that cost us about $0.10 to make for those "fasten seatbelt" overlays. And, our company won the bid because it was the cheapest, if you

    • Re:Fedbiz (Score:3, Insightful)

      by Elwood P Dowd ( 16933 )
      As a startup, apparently you don't know that contractors get screwed like that by absolutely everyone. The feds are mildly worse.

      And there are plenty of small businesses and startups that make their living contracting for the gov't. You just have to know how long it takes to get paid.

  • successful low cost startup (Score:3, Interesting)

    by butane_bob2003 ( 632007 ) on Tuesday December 02, 2003 @02:27PM (#7610654) Homepage
    tallgreen.com [tallgreen.com] Recent startup, still relativly small, Provide Open Source CMS hosting using WebGUI [plainblack.com] (cms), Communigate (email) AWStats (stats), Resin and other open source software. No VC, No debt, No CTO, Low overhead and primarily service based. It doesn't take much to start a small company and grow. Know your market, find ways to reduce costs, provide good products/services.

  • What about dumpster diving for startups? (Score:5, Interesting)

    by RedCard ( 302122 ) on Tuesday December 02, 2003 @02:27PM (#7610655)
    Sometime you don't need money to make money, just the will to rummage in the trash.

    There's always the story of Wallflower [wallflower-systems.com], a company that makes digital picture frames. They got their start by buying ancient laptops [alwayson-network.com] (considered scrap) and re-shaping them.

    Sometimes, you can start a business with nothing but a little cleverness, and an order from the scrapyard.

  • Other bootstrapping tips... (Score:5, Insightful)

    by cjustus ( 601772 ) on Tuesday December 02, 2003 @02:28PM (#7610658) Homepage
    • Rather than getting office space, rent a bachelor apartment... this allows you to pay home rates for your phone line(s), internet access, etc...
    • Don't get business cards until you absolutely need them (or print yourself as required)
    • Buy equipment only as you absolutely require it...
    • Offer people (more) flexible hours for reduced pay (ex: 70% of normal salary for 3/5 days work)...
    • Have employees work from home on their own equipment...

    On the negative side... In a country such a Canada where you can claim R&D tax credits, you can only claim these credits on real expenses - so if you pay yourself (next to) nothing, you won't be able to claim any of that as a tax credit...

    • Agreed. You don't need an office until you have employees, me and my business partner run things from our laptops and save $4 to 800 per month on rent. Business cards are for sales people and CEOs, unless you are doing a lot of handshaking and networking, business cards are useless. A good way to handle this is to print some generic cards with you company logo, web address and a company phone number/email. Employees can write their email or phone number on back if they really need to.

      Correct me if I'm wr
      • Just to clarify... While you pay people that you must, you pay yourself enough to survive [food... shelter if you don't sleep in your "office" :) ] ... If I'm paying myself a tenth of what I would be making as an employee, I can only claim that amount...

        "Sweat equity" does not count as an expense and is not claimable... They need to see money actually moving from one account to another... BUT don't take my word for it :) Trust what I say with as much as you paid for it :)

      • Business cards are like $50 for 500. If you don't have $50 to spend its doubtful your business is going to go far in the first place. It's important for a startup to at least look somewhat professional. Also since startups start with a single person or a few people someone needs to be meeting and greeting so business cards are a must IMO. I agree that maybe in your case if your a programmer or something and never meet people it may not be needed, but I think for most people its a good idea if its a small st

    • Re:Other bootstrapping tips... (Score:5, Interesting)

      by WasterDave ( 20047 ) <davep AT zedkep DOT com> on Tuesday December 02, 2003 @02:42PM (#7610756)
      The office space thing is absolutely wrong. Sorry, but it is.

      I'm currently in an incubator - i.e. sharing space with about a dozen other small 'trying like hell' companies. It costs too much, but we and the other companies in there regularly get together to land contracts that any one of us individually couldn't get.

      It's not just incubators that get this. I saw a similar effect when working in some serviced offices. Get to know the people around you, become known as a man that can, work will arrive all of it's own accord and suddenly the rent starts to look like a bit of a bargain.

      Dave
    • My wife keeps trying to convince me of that, but I want my little storefront on the main drag like a bad toy.

      What a codemonkey needs with a storefront I don't know. I've just always wanted one.

    • You should get business cards if you ever talk to someone other than yourself in person. Heck, even if you just correspond, you should have them. Don't print them yourself - you've just proven to every other buisness that you're a temporary endeavor. Get simple business cards printed by your local shop or big-box office supply. One color on decent stock. The basic variety is about $20/1000. You can't print 'em, on your inkjet for that much. Spend a whopping $40-45 and you can get a nice linen cardstock.

    • Rather than getting office space, rent a bachelor apartment... this allows you to pay home rates for your phone line(s), internet access, etc...

      The only problem with "consumer level" Internet access (with cable modems, DSL, et al) is that you also get consumer-level guarantees. Businesses can get 99%+ uptime guarantees (or similar), but consumer access has no such provisions.
    • "# Don't get business cards until you absolutely need them (or print yourself as required)"

      The rest of your post was fine, but this is completely wrong. Business cards are dirt cheap to print at Kinko's or somewhere. What are you going to do when you meet potential clients/customers? Are you going to ask if they have a pen to write down your website or phone number? No, well, not if you want their business at least.

      Business cards are a great way to make contacts because it contains all of your importan

  • German Translation... (Score:4, Interesting)

    by DaneelGiskard ( 222145 ) on Tuesday December 02, 2003 @02:29PM (#7610671) Homepage
    ...I think the "local translator" for germany was called babelfish ;-) (or at least a close relative of it ;-)).

    Ok ok, it's not _that_ bad, but I guess it's been translated by either a non-native or a native with quite small technical understanding (translation of specific IT terms sound a bit funny...).

  • Grandma please! (Score:4, Insightful)

    by faust2097 ( 137829 ) on Tuesday December 02, 2003 @02:31PM (#7610684)
    The recipe for their success was ... hiring GUI designers from popular skins download sites.

    Too bad they didn't hire any actual user interface designers [or at least a graphic designer for their website or even someone who could figure out that it doesn't draw scrollbars in Mozilla]. The 'skin' scene is nice if all you want is eye candy and shiny objects but little else. And looking at their software it doesn't even look like they listened to those desingers much.

    User interface design for software is not a paintjob or some quick usability fixes while you're in beta, it's a part of product development.

  • You only need loads of cash if... (Score:5, Interesting)

    by baine ( 600693 ) on Tuesday December 02, 2003 @02:31PM (#7610685) Homepage Journal
    Your main goal is to immediately quit your current job. If your goal really is to start something new, then in many cases (but not all)your dedication and discipline will weigh more heavily than your financing.

    There's always the hours after your 9-to-5 (assuming it's a 9-to-5), and they are yours to spend as you wish. If you want to risk your time (and maybe a few of your buddies' time) on a venture that may or may not generate any income, the risk/benefit is pretty well in your favor.

    Yes, it is hard to be disciplined enough to find the time when you go home, or to treat it like a real project rather than a hobby, but these are matters of self control, and usually within a person's own determination.

    The moment you ask someone else to fund your venture, you are turning over some part of what determines success or failure to someone else.

    • Check your contract (Score:3, Informative)

      by Kelar ( 88944 )
      Many companies have you sign explicit NDA/Non-Compete agreements which will explicitly disallow you from doing any outside work.
      Some will even claim that any intellectual property created as a result of you working outside of work hours will be owned by them.
      Many people have been screwed by this in the past.
      • Many companies constantly try to find highly intelligent, well educated, experienced, self-starter employees: exactly the kind of people who, if they had the opportunity, would probably start their own business.

        These companies then go on to lose these people because they try to force them into servitude instead of allowing them to help build the business.

        The servitude policies are almost always enthusiastically endorsed by middle management.
        • These contracts are not enforceable in many locales. Also, it's only a problem if they can prove you developed code while you were working for them: Who's to say you didn't write it all the week after you quit, for example.

          I make it clear that work done on an employer's dime and equipment is theirs. Work done on MY time and equipment is mine. Everyone should do the same.

    • I guess it depends on what type of business you are starting. I found it very difficult to get started as a part time business. It is difficult to do your business when all of your potential customers, suppliers, etc are also off from the normal work day.

      I also found that knowing that I was screwed if I didn't start making some money helped a great deal. Starvation is the ultimate motivator. As long as I still had a paycheck coming in, I didn't push myself as hard as I was forced to after quiting my jo

  • Start Small (Score:5, Insightful)

    by EvilTwinSkippy ( 112490 ) <{yoda} {at} {etoyoc.com}> on Tuesday December 02, 2003 @02:32PM (#7610696) Homepage Journal
    There is no law that says you have to leap right out of your current job and into a startup. If you are developing software, you and your developers are the most expensive part. Developing your product can be as simple as taking a few hours out a week and, well, develop it.

    Remember, Hewett Packard and Apple were started out of a borrowed garage.

    I am currently running a web developement firm and an ISP from my basement. It's not enough to quit my day job, but it does help line the pockets around the holidays. My market is small non-profits and family run businesses who are sick of dealing with large ISP's, and getting raped by web designers. My product is reliable service for a good price, and the ability to tweak the system to make it do what THEY want it to do.

  • another reason to bootstrap.. (Score:4, Interesting)

    by BigGerman ( 541312 ) on Tuesday December 02, 2003 @02:33PM (#7610704)
    .. is control.
    If you do it the VC way, they will force some people on your board, heck they will force you to _have_ a board. They call it "adult supervision". There is alot of flexibilty you are going to have to give up.
    I went through all circles of VC hell and finally decided to go slowly and by myself.
  • Your are in luck a /. reader is doing it in real time and talkign about it on my blog..

    Current status ..paper work for LLc company formation is being prepared for incorporation ..expect approval back beg of Jan..

    Business plan is currently bering prepared for VC review in March to July 2004 time frame..I foudn a Buziness plan contest that allows me to get the review by VCs..

    First product release beg jabn 2004..

    and yes I contribute to opensource!
      • 1) Establish LLC
      • 2) Search for VC funding
      • aaannd... the ever elusive 3) Take ESL [google.ca] classes
      • 4) Profit!
    • so you are wasting time then?

      paperwork for a LLC... why? there is no law that says you have to incorperate. be a business owner.

      Business plan? good idea... VC review? why? who in their right mind would want any VC scumbags near their dream? VC's are not interested in building a long-term anything.... they want a return ASAP.

      go slow, unless you are building a product that requires that you sell X units a day to survive, or X number of subscriptions... (Then your business model is horribly flawed.)

      I'
    • ... hope the product isn't a spell/grammar-checker :-)

      Your are in luck a /. reader is doing it in real time and talkign about it on my blog.. Current status ..paper work for LLc company formation is being prepared for incorporation ..expect approval back beg of Jan.. Business plan is currently bering prepared for VC review in March to July 2004 time frame..I foudn a Buziness plan contest that allows me to get the review by VCs.. First product release beg jabn ) 2004.. and yes I contribute to openso

    • You're not bootstrapping. "Paper work" for an LLC? You sign a form, send it to the state with a check, and you're done. There is no paper work.
      VC? That's the exact opposite of bootstrapping.

      But of course, based on your lack of reading/writing skills, maybe it takes you several months to sign a form and send it in...
    • I see a lot of replies here which are attacking this guys idea in some way. This is stupid - at least he is doing more than most people are doing, and i think that is the key. To be successful you just need to adopt the attitude to "just get it done". Most people spend their lives going on about stuff without ever actually just doing it. So before telling him he is wrong or that his spelling is bad (it's Slashdot - I'm sure he writes better when it matters) how about a bit of positive re-enforcement.

      Pers

  • Working on it (Score:5, Interesting)

    by Anonymous Coward on Tuesday December 02, 2003 @02:47PM (#7610792)
    My partner and I have an online service that we have launched with basically no money. We are entering our third month, and we are breaking even already. Actually made a peep of a profit last month.

    Since we have no money to play with, we find advertising to be the most difficult aspect of starting a business. We do the cheapest things imaginable, and quite often simply ask for established sites to support us, flat out. Google adwords helps also, especially since our keywords are cheap. For payment processing, we use paypal because we cannot afford the setup and gateway fees of a proper service.

    The site design and hosting was actually the cheapest part, as he is a graphic designer and I sling code and already have adequate hosting for our service. Hehe, I would post a link but no way can I survive a slashdotting, even a mild one. We have just enough to get by on.

    Anyway, we are not making a lot of money, but we started with almost nothing and are ( however pathetic ) profitable and growing rapidly. You just have to be creative, have a service people want, and be willing to beg for eyeballs sometimes. Good luck to anyone who is trying it. With a bit more money than we have to work with, you might do quite well. You will certainly get there faster than we are.

  • local talent too expensive? (Score:5, Insightful)

    by fermion ( 181285 ) on Tuesday December 02, 2003 @02:50PM (#7610816) Homepage Journal
    using the web to find native translators instead of using over priced local ones

    Where have we heard that before. Are we now advocating shipping jobs offshore as long as it saves a lot of money and does not affect quality? Or is it that these jobs were not IT positions, so no one cares.

    Anyway, the whole post sounds like an advertisement. Hope /. got comensated.

  • Translation ? (Score:3, Informative)

    by nsebban ( 513339 ) on Tuesday December 02, 2003 @02:51PM (#7610827) Homepage
    Are you sure they paid someone to translate pages ? The french translation must have been made by some guy who had never talked french before :)

  • Bootstrapping a startup... (Score:5, Funny)

    by EvilTwinSkippy ( 112490 ) <{yoda} {at} {etoyoc.com}> on Tuesday December 02, 2003 @02:53PM (#7610854) Homepage Journal
    Isn't is usually:

    # Boot automatically after 30 years.
    timeout 30

    # By default, boot the first entry.
    default 0

    # Fallback to the second entry.
    fallback 1

    title Working for Myself
    root (hd1,0)
    kernel /vmlinuz

    title Working for the Man
    # Always likes to put itself first hrumph
    rootnoverify (hd0,0)
    makeactive
    chainloader +1

    title Begging for Change
    root (hd1,0)
    kernel /vmlinux home=/dev/null

  • Outsourcing IT overseas? (Score:4, Insightful)

    by Kombat ( 93720 ) <kevin@swanweddingphotography.com> on Tuesday December 02, 2003 @03:00PM (#7610913)
    Part of their "recipe of success":

    using the web to find native translators instead of using over priced local ones

    Did I miss something? Aren't we opposed to outsourcing jobs overseas? Don't our big tech companies consider us "overpriced local programmers?" So, when it's a little guy, outsourcing to cheap, overseas labour is "innovative," but when IBM/Sun/Microsoft/Dell does it, it's Anti-American, and worthy of a global-scale boycott?

  • Startups (Score:5, Insightful)

    by Brandybuck ( 704397 ) on Tuesday December 02, 2003 @03:01PM (#7610918) Homepage Journal
    How many of us thought that it can't be done due to costs, the need of big bucks and convincing some snotty VC? Well it didn't stop these guys.

    Those with short attention spans are doomed to repeat recent history.

    Unless your startup needs a factory, gobs of employees, or other extensive capital, you don't need megabucks, only kilobucks. No need for snotty VCs, selling off rights to future IP, etc. It's still hard, but 95% of existing businesses have done it.

    You just have to start small. One of the worst legacies the dot.boom left us was the general perception that businesses have to be large to be successful. Nothing could be further from the truth. I don't have the current statistics, but last I heard them a few years ago, 80% of businesses in the US had 20 or fewer employees. In other words, small business is king.

    I've worked closely with many individuals who have started businesses from scratch. It's not cheap, but it doesn't require millions from venture capitalists. Your credit cards, retirement savings, relatives and a trip to the local bank are often all that's needed to start out small. And small is all that you need. You'll be working your butt off eighteen hours a day, but you can do it.

    If this is software, you've got a headstart over most other businesses, since you don't need to carry inventory, rent warehouses, or run factories. All you need are salesmen and developers. The developers may be expensive, but your salesmen will be cheap, since they'll be bringing in their own paychecks. As a bonus, your product is infinitely reproducible at no cost. Heck, you can even contract out development to bring in cash flow while your main product is getting ready.

    Your hardware isn't going to be that expensive, if you stop thinking like a gamer. You can get away with old i386 or Sparc5 boxes for your servers. If the software is ultimately an end-user product, you'll need a variety of current hardware to test on, but otherwise it's a luxury you can't afford.
    • and a trip to the local bank

      Where you will be stared at as if you had just landed from Neptune.

      Unless you have some nice juicy collateral, that is. Something on the order of a paid-off half million dollar commercial complex that the bank can sink five-ton chromed hooks into for a $20,000 loan at 28% interest and $4800 in up-front fees (which must be paid out of the loan, so you get to pay 28% interest on the fees too).

      Oh, and don't even think about the SBA. lol It would cost you the whole $20,000 ju
      • Where you will be stared at as if you had just landed from Neptune.

        If you walk in without a proper business plan, no cosigners or references, wearing a ratty Slashdot teeshirt, then you might as well stay home and bitch about how unfair the world is.

        But banks are in the business of loaning money. It won't be easy, but that's what they're there for. Don't go to a large national bank like BofA. Go to a local community bank instead. Yes, you're probably going to need collateral, but it will be on the order
    • Wasn't Cisco initially funded by maxing out the founders' credit cards?

  • Work Your Tail Off... (Score:3, Interesting)

    by Anonymous Coward on Tuesday December 02, 2003 @03:04PM (#7610945)
    I started a software company as an experiment a couple of years ago. After a lot of long nights it is slowly getting to the point where I might be able to make a living at it. I have one full-time employee now and I manage to take a couple K out each month. Through the whole process I have worked another job to pay the bills. My take on your question is that nothing is going to get you off the ground but hard work. Nobody is going to throw money at you. Build a simple product that works well and performs better than what is out there. People will buy it, distributors will find you. But you have to work hard and be dilligent about quality or you shouldn't even start.
  • and thats two times too many. crappy website. crappy product. htf does this stuff make front page ??
  • CompleteLinux.Info [completelinux.info] is my startup.

    As a Linux Admin, one thing I have realized I'm not very good at is marketing -- I tried Google AdWords, but I didn't get a high-enough hit ratio to survive.

    Maybe it is just hard to produce a non-free product or service for the open-source community. Of course, if the demand is there, I'm sure businesses would be the ones to provide the cash-flow...

    (DNS seems to be an issue right now though.)
  • The book Under the Radar [arnoldkling.com] by Arnold Kling (available on Amazon.com [amazon.com]) goes into the subject of low overhead startups in great detail. The book has the subtitle "Starting Your Net Business Without Venture Capital".

    One of the big points made in the book is that the incredible overhead of venture capitalists can, and often does, sink a startup company.

    The book covers Arnold Kling's [arnoldkling.com] attempt to start homefair.com [homefair.com] (an online real estate service) way before anybody had a clue about what the Internet could do for real estate. It's funny/frustrating to read how many clueless bankers and real estate agents blew him off.

    • Good to Great [amazon.com] by Jim Collins [jimcollins.com] is also worth a read. The concepts are simple and the ideas are based on emperical research. At no time should you think that any book has the *answer*.

      Best of all don't buy the book, save some money and read it online [jimcollins.com].

  • My own experience with snotty (and clueless) VC (Score:4, Insightful)

    by Mark_in_Brazil ( 537925 ) on Tuesday December 02, 2003 @03:21PM (#7611088)
    Heh. "Snotty VC" in the blurb reminded me of 1999, when I was employee #4 at a software startup. The company makes software for a specific type of business. Through tests we had done, we could prove that we were capable of increasing profits for companies in the target market by 25%-100%.
    Unfortunately, as I said, it was 1999. Smart VCs like John Doerr had seen good business opportunities in companies like Yahoo!, Amazon, AOL, and others, and made huge wads of $$$ for their firms through shrewd investments. The clueless wannabe VCs apparently missed the point that-- internet or not-- the success of investors like Doerr was based on careful evaluation of business plans and business models. The Doerr wannabes apparently said to themselves "John Doerr made a lot investing in internet companies, so we have to do the same." I figure that's how multiple internet pet shops and ridiculous internet businesses got funded, with many even going to IPO without having anything resembling profit in the foreseeable future or even a decent roadmap to achieving profitability. In /. terms, many of these companies did indeed leave out step 4 before claiming that step 5 would be "Profit!"
    Getting back to how this was relevant to my personal experience, the founders of the company (employees #1 and #2) would make their presentation to some VC, again, showing that the company's software could produce billions of dollars of value for companies in the target market, and the response was almost always the same: "OK, but what's your internet story?"
    Most of them were really snotty, saying that "these days," anything that isn't internet-based doesn't have a chance, or something equally short-sighted and clueless. But they said it with such authority and such snottiness that it would make even the strong of stomach want to vomit.
    At the time, I said "Let's just change the name of the company to 'e-(Real Name of Company)-dot-com' and we'll be swimming in money!
    After that, I became a big fan of F**kedCompany [fuckedcompany.com], which now seems to include non-dot-coms a lot more than it used to. Back in the day, it was more focused on reporting disasters in dot-coms that probably never should have been funded. Every time I saw another online business with no clear sustainable revenue stream (the $$$ from idiot VCs desperate to pour money into anything dot-com doesn't count-- it has been proven not to have been sustainable) go down the toilet, with an amusing report on F**kedCompany, I would snicker and say to myself "Yeah, I've got your internet story RIGHT HERE!"

    --Mark
  • Let's play buzzword bingo today. Get out a scrap of paper and write down all the buzzwords you can think of. Try these on for size: leverage, startup, incubator, robust, enterprise, blah, blah, blah ...

    I worked for a now defunct non-dot-com company that tried to become a dot-com and it succeeded in the fact that it failed like so many other dot-coms. One of the more hare-brained ideas was for an incubator incubator. I think he meant a some kind of factory for minting startup companies.
  • It seems like a lot of developers have great ideas for programs that will make "lots" of money if they only had about 10 million to develop them.

    My bet with my own shareware company is to start small and hang in there. Right now it is just a job for when I come home, but eventually, hopefully, it will build up to something.

    I know a few guys that run brick and mortar and web based businesses, and there whole secret is persistence. Just, start small, then, hang in there. Look how long Linux hung in at the hobbiest level before it really took off? How was 1994, 1995, etc, for Linux? Really? Those were some lean years.

    Start small, keep building, then, hang in there. Either you will make it or you won't.

  • examples of startups to look at (Score:4, Informative)

    by goon ( 2774 ) <peterrenshaw@sel ... al.com minus bsd> on Tuesday December 02, 2003 @05:13PM (#7612062) Homepage Journal

    a good read for any startups is Joel Spolsky's [joelonsoftware.com] journey in building [joelonsoftware.com] his company from scratch [joelonsoftware.com]. Put aside your predjudices about his software origins [microsoft.com] or the market he is aiming at [fogcreek.com], but make sure you read and digest some of the ideas [joelonsoftware.com].



    It's a cheap way to read how he's organised his company [fogcreek.com] from 1999 to the present.

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