What Could You Build with $10k?
hackernoon.com
hackernoon.com
If you're just talking about company expenses, then $10,000 will go a long way. You need $500 to set up a company with Stripe Atlas [1], $100 to purchase the initial shares, $100/yr for a registered agent, and $100/yr to file taxes. You can do your own bookkeeping or use Bench for $135/mo. Stripe Atlas also gives you $5k of free AWS credits, so you don't have to pay for hosting for a few years. Then you can spend the ~$9k on whatever you want (other SaaS services, design, landing pages, etc.)
Apart from the Stripe Atlas fee and share purchase, I didn't put any money into my company. I was still doing contract work and wasn't taking any money out of the company, so it was "profitable" as soon as I had a single paying customer.
I think ~$1,000 is probably the bare minimum if you want to start a company and bootstrap a SaaS product. But it's always better if you can have a healthy bank balance for unexpected things.
I don’t advise this as the optimal path. I think it is far wiser to spend your time researching a strategy that you can sell to rich investors, and using their actual money rather than your ramen noodles.
If anyone's interested, I recommend Harvard Business Services (Delaware registered agent is $50, Delaware filing fee is $90, and HBS takes a cut of $50 if you use them for both parts). For a business bank, there are several (free) options and the one that Stripe Atlas has partnered with, Silicon Valley Bank, does not have close to the best reputation.
Edit: The AWS credits however substantially change this calculus.
If I hadn't consulted a CPA I would have had a large tax burden.
This is a pretty good write up:
https://www.cooleygo.com/so-you-owe-thousands-in-delaware-fr...
The typical LLC has few or no investors (that are not managers or members), and it’s unusual for Delaware LLC law to provide much advantage over any other state in that case. YMMV.
Members are the LLC analog of stockholders in a corporation; if there were equity investors (passive or not) in an LLC then they would, by definition, be members.
“Few...investors that are not ... members” is impossible, as you note.
Do you actually feel confident that you're filing business taxes correctly by yourself? If so, how did you get to that point? The IRS and the tax code are not things to be trifled with, and I wouldn't want to take any shortcuts there.
One of the most frugal people I know lived on slightly less than $10,000 per year [1] while traveling around the world. That sounded extremely low to me, but you have to remember that the worldwide median income is about $10,000 [2].
[1] https://thedeepdish.org/2017-spending/
[2] https://news.gallup.com/poll/166211/worldwide-median-househo...
1) Subcontracting work on upwork,logo design, etc. You can get quality contractors for under $100 / hour easily in many domains
2) Buying LTL freight and MoQ orders for physical goods overseas
3) Buying tooling for most small processes
4) Getting consultant experts in your domain not related to business, but rather hard to get information
5) Recruitment services (indeed)
6) Paying for monthly SaaS programs to help you lay out processes
7) Registering domain names
8) Rapid prototyping with local fabrication shops
9) Getting a shared coworking space for $100 to $500 a month to establish a meeting place for localized service-based contracts / networking
10) Paying for courses online to learn all the tools you need
11) Paying for housing/food/etc in the very few months of operation
12) Hiring your first subcontractor lets you lay out processes on slack/notion/trello/insert_project_management_tool etc. So you can start laying out SOP (standard operating procedures) that scale well over time, and find loopholes through rapid A/B testing
You can build anything you want once you reach a reasonable baseline. Also you can be super cheap about everything you do too, you can buy scraping tools for instance for $300 a month or more, or you can just run your own scrapers with a $5 vpn/month service.
The bar is blueberry flavored, but there are no blue berries on the list, and no sight of artificial flavors in the list either. And none of the other component taste of blue berries at all.
Obviously there must be at least blue berry flavors be in there, but they are not listed.
They end the list with "no B.S." but then they are obviously insulting the intelligence of the reader in such an obvious way.
Does that really work with customers?
From http://go.rxbar.com/l/68472/2018-06-20/9t5vsn/68472/171769/1...
IIRC the full ingredient list is there on the package, as well as available online.
I found them pretty tasty and without any scary side effects (bloat being a common one with protein bars) -- but I was probably predisposed to like them, since the thing I really dislike about most protein bar brands is that everything tastes like candy bars. I don't want candy after I work out, I want protein that doesn't taste disgusting and ideally is not an extruded animal part. (No idea why Cliff Bars coat everything in "chocolate" but I guess they know their market for the Builder Bars.)
The dates are the "glue" so to speak, and there's a pretty long tradition of that in natural foods. There are a couple of different fairly obvious reasons why the founder would have tried dates, and you can hear about them in his How I Built This interview[0].
I'm not convinced that 12g egg protein is as good as 20g whey protein, which is pretty much standard. But I'd happily suspend disbelief in order to get rid of the damned chocolate-caramel-stevia plague.
[0]: https://www.npr.org/2018/08/10/637619434/live-episode-rxbar-...
I personally just mix some powdered whey protein in a yoghurt. Beats any of those bars easily and is trivially easy to do.
When I was hustling into the fray of starting a direct to consumer business, our head of branding and marketing previously ran the launch strategy at AdoreMe, a lingerie company. When they launched, they decided to feature a corset only line since it was the only lingerie related keyword on google that Victoria Secret wasn't bidding on it. They combined that was early influencer marketing to dominate a niche with cheap cost per click.
I therefore think it's more interesting to break it down by how you get that time. I see a few categories:
1. Have rich parents. Yes, yes, this is true of some people (but probably fewer than you think), and isn't very interesting except for starting political arguments.
2. Have a supportive partner on whose earnings you can live. This is much more achievable for many people, and under-emphasised (it's common for, eg, postgraduate education!)
3. Have an existing consulting work that gives you steady work 1-2 days per week. People say "startups die by consulting", and they're right, but what kills you is finding new work (it becomes the "top idea in your brain", which is lethal). If you have an established client who's happy to spend a year paying for 1-2 days a week, you're perfectly positioned. (This is how we started https://anvil.works, and I can't speak highly enough of it)
4. "Productised consulting" - consult full time until you come up with a product that all your clients will buy immediately, then switch to selling that product. This sounds great in theory, but I've seen a few people try and fail to make that leap (possibly because it's really hard to stop "find new consulting work" from being top idea on your mind, especially if you have employees/partners to feed).
5. Have a business with good cash-flow characteristics that can be launched fast enough to become self-sustaining within its first month. This is what this article seems to focus on, but apart from "productised consulting" (where you start out selling something that's not your product), I'm very skeptical that it really works for product businesses. If you try this, I'd recommend having a fallback to one of options 1-4!
My wife an I have taken turns shouldering our living expenses to good results. If it's manageable -- you both make enough individually to stay out of debt -- I think it's a really good fit. You both benefit if it works. If it fails, you're maybe out of some savings plus opportunity cost, but not in debt or having to deal with investors.
Meanwhile, increase your savings rate so that you might be able to make the leap sooner. That way if it gets to the point where you're profitable, but not yet making enough to cover your expenses, you can potentially jump ship earlier than you would've been able to otherwise.
It's pretty much the plan I followed and so far it's working well (left my job ~5 months ago). On the topic of increasing your savings rate, some of the ideas/mindset from https://mrmoneymustache.com were helpful.
It probably varies by area of the world/country as well. I imagine the long hours are more the norm in the middle of a startup hub city vs. out in the suburbs.
6. Get lucky with whatever you pick to that effort into. It's hard to predict that your idea is actually a good one.
I don't know the authorities who "have observed", my observation differs a lot: most businesses that still exist after 5 years have done exactly that. But that, of course, requires a "we have a solution to a problem we have, let's sell that"-mindset, not a focus on exit.
Which is why it's so important to spend that money wisely. If you're in your parent's garage, you might want to experiment with AWS (but for a strictly limited amount of spend and time) - just to get a feel for what it's like to scale. It's a common mistake to build a bare bones solution, and never have to worry about scaling.
A year is pretty decent runway if you have the skills already.
However I would imagine that most places where you can live on 650GBP per month the only way to keep sane on that budget is with a lot of support from friends and family.
Obviously the title amount is in 'retrospect'. Also it does not imply any specific time-period. A lot of ground work is put into a business idea prior to even forming a company. This is often an undisclosed cost of success.
In retrospecitve with astronomical exits like RxBar's this just sounds like an angel's dream.
Overall RingCentral and the other top-10 providers are shifting their focus away from SMBs to large enterprises. There is a big hole to fill. They are losing customers as fast as they gain new ones. This is a huge opportunity for smaller operators.
If you get just one 20-person office customer per week (or multiple small ones adding up to 20 users total), after 1 year you are at ~$22K MRC at standard prices. And this is the bare minimum that you will be getting with bare minimum effort... people don't realize how big the opportunity is in this double digit billion dollar market.
Still trying to figure out the best route since so many of these places have poor UIs or don’t support physical phones and fax very well. I can’t imagine I’m the only one running into these problems so their is an opportunity here.
Dialpad is definitely playing the long game here and will be the clear winners 10 years from now. I predict Amazon will acquire them in the next year or two.
More and more businesses are switching from on-premise telephony to cloud based hosted PBX. The addressable market is very large, latest estimates put it at 55+ million seats. That's before you consider the contact center market... just focus on getting to 500, then 2000, and so on. It's not difficult. 2000 seats bring you $50K MRC, and again if you know how to this right, especially coupled with intuitive self service UI to the end users, overhead is very very low. And the actual Telco costs are too tiny to even worry about. About 75 cents per user.
I thought about starting a "how to start a VOIP business" webinar or somethint.. its amazing how many are trying to create SaaS products in obscure fringe markets where the VOIP market is pure gold.
I would love more of a blend of phone.com/ringcentral + using the designers of Dialpad. Their interface seems a lot nicer. With the more traditional ones it's nice that you can call them and they'll ship you ready to ring phones that connect to the cloud based PBX. This is huge and needed but Dialpad does not do this. Just look at their docs, you have to specify an IP and quite a bit more configurations unlike the shipped ready phones, but I have a feeling this is because of their licensing terms.
Being able to move around or take your deskphone with you home, to a coffee shop, anywhere that has an internet connection is quite useful. Again, talking about a physical deskphone that connects via wifi or ethernet. I'm aware using a cellphone with an app easily does this but often that's harder to sell to some more traditional folks.
Agree that this market is gold and this would be a really fun project to piece together, though the type that I want to exist might not be doable for $10k.
Sure, $thing cost $5k-$10k to start. That says nothing about how you live, how you pay for rent/food/health/internet, or how to pay for dependants. Even if you live in Shithole, USA, these costs are still up there. And likely in that location, internet service is extremely lackluster or just plain non-existent.
Most startups get away with low spending is because of rich family. When you hear a $elite_school dropout spinning around and making $empire, its not because they did it by themselves... Their family capital to take care of those other costs is what made that happen. But the Horatio Alger story keeps people believing and wanting - they never look at the facts. No, you won't find the "gold wrapper", statistically speaking.
But keep pushing the idea that prosperity can be for everyone, and its just around the corner. For most of us, its not and never will be.
Edit: Ah. -1's but no actual discussion/refutation. Looks like I hit on a sore point. I'd love some hard data here.
I think you are too negative but there is definitely something true about a lot of founders coming from well off families. A long time ago I did some business ventures with people from wealthy families and I quickly noticed what advantage it is to have family that can give you a place to live, a car and some other necessities. These guys lived a frugal life but they didn't have to be afraid of going homeless as I was since I had nobody to give me money.
Its not negativity; its anger.
We have this idea.. That you can only with $5k make your own multi-million dollar empire. But you're just too lazy to do it.
And that's far from the truth. Obviously, rich family kid who dropped out of $elite_school isn't going to be homeless. So, they get an "angel investor" (read: family). And those other services you need, like legal, sales, and dozens of other things are smoothed over by quiet words said at social functions, 'My son needs some internet business help to present to VCs'... And they have the connections to get it done.
Summing it up, it is access to money, a strong social net to fall back on, time, access to resources, and access to connections.
The VCs and rest can pretend that anybody can, but I know nobody who could do this for a year, possibly fail, and recover. We all would be sunk and feeling these ramifications for years.
Even many "rags to riches" stories are frequently more about luck and building a network of support from which the business can be launched than they are about scrappy business sense.
Take WhatsApp's founder: a true self-made, rags-to-riches story. Underlying his self-made success is that he'd built a solid network and financial padding working in high-paying tech jobs at places like Yahoo. He worked hard to reach a point that most founders are simply born into and then launched a successful business.
I can't risk my savings on a startup, because running out of savings means homelessness and hunger. Even without dependents, many people don't have parents willing or in a position to be the guarantor of such an investment.
You now have a gap of unemployment. How does your next employer see that? I know a common tactic in IT is that you're a "consultant" when unemployed. Hiring managers see through that readily.
So what then? You have a failed business, unemployed, and take a pay cut on your next job... all for the hopes that you might, just might strike it rich?
Again, this situation doesn't apply for those with well monied family and significant connections.
But what do you propose as an alternative?
I personally have no issue with parents wanting to help their children to have a better life than they did and giving them a helping hand because without this you'd have a caste system. My blue collar parents struggled to put my sister through UCLA and now she and her husband (who grew up very poor but also went to UCLA) can afford to send their daughter to whatever $elite_school she wants in a few years without any question on the costs.
So if my niece somehow manages to make $empire it truly isn't solely her doing it herself but a generational effort and not X privilege as you imply.
I'm the refutation of your claim. My basic bills are $1,600 to $1,700 per month (depends on winter vs summer), which includes a modest mortgage. I can live nearly anywhere within 80-100 miles of where I'm at, in any direction, for the same rate. Living in a nice (non-urban) location, with a near zero murder rate, low crime, tons of nature right out my door, with a low cost of living, on the east coast. Normal access to slightly expensive, high quality broadband cable, costs me $70 per month.
Doing mediocre contract work 20 hours per week would pay my bills.
Working on a start-up right now. My runway is, for practical purposes, perpetual, thanks to my low cost of living. I'll never need venture capital again the rest of my life, and I'll never need to stop working on whatever start-up concepts draw my attention. There are some things this combination makes it possible for me to try, that others - eg in SF or NYC - can't or won't attempt because it could be financially ruinous due to the very high cost of living.