How to start a business with no money

Good: "I need revenue to buy the stuff I think I need to make more revenue. I guess I'll have to make something people want and sell it to them."

Possibly good: "Well, I can't afford web design, but I'll stretch this OSS template about as far as it will go until I have enough money to pay for a redesign."

Not good: "I don't have $50 to spend on icons right now so instead I'll waste several hours embarrassing myself in Paint.NET and ultimately come up with something which is ugly, converts poorly, and distracted me from tasks where I actually add value."

Speaking of which: open source. Its not just for software anymore. You have to dig through a lot of junk to get them, but there are OSS designs which are far, far better than what you'll come up with (resident designers excepted). I recommend Styleshout for that Web 2.0 look, and oswd.org (and a whole lot of needle-in-haystack searching) for finding a good template for anything else.

Also: Wordpress (free) + $4 a month hosting + writing skill (I hope you've got it) = cheapest marketing you will ever accomplish, and some of the most effective, too.

The problem, however, was that most people just aren't built for startups. So while I kept things extremely fair — everyone was on a 50/50 profit share, myself included, after operational expenses were paid (less than 4%) — that just wasn't enough to keep people motivated to reach the 2-3 year end goal.

To be fair, I think it was less about motivation and more about income and lifestyle. But again, most people just aren't prepared/designed for startup life which in this case would have required they code in the evening hours after their full time job was over. Ha!

Startups are difficult, getting traction is difficult (the juice), and I would say that assembling a skilled team is equally challenging and will significantly impact chances of success/survival — never settle with your team. The challenge with building a team is that startups will change people, especially virgin startup-ers who've never experienced the workload. Burnout/frustration in combination with low pay and kool-aid stock options will destroy a team in a year or two if they're not prepared.

All that being said, this month I've decided to take a drastic turn and attempt to raise a small amount of money to make a few full-time hires. The good news is, I proved myself as a young entrepreneur and we may secure a really awesome lead investor that could do a lot more for us than just give us money.

I definitely recommend bootstrapping, it helps you set realistic priorities based on severely limited resources (prepares you for when times are rough), and helps you find the holes where investors can provide value besides just $$.

This relies on you being a trusted and valued worker for the firm who allows you to work 3 days. So work hard at your job and the management will likely be okay with you asking.

That's what I did for a couple of startups.

Having a work-day or two available for work-time meetings with customers and lawyers / suppliers makes a large difference. People treat you more seriously when you are able to make a daytime meeting.

Careful calendar managament can give the impression of a full fledged business.

Until of course you need to support customers, and suddenly they need support at all sort of inconvenient times. Nothings perfect!!