[Guest post by Shabda Raaj, an entrepreneur who started 42topics.com, a site dedicated to finding interesting stories from the wild web. In this post he walks us thru' few very cool tactics to bootstrap one's startup.]
This is a very hands on guide to starting a web based startup, without having much money. This is a very personal tale! Once you have been bitten with the “I want to start a startup” bug, you can not but do this. Probably you have no money, or no co-founder, or even no idea. No problem. I did not have any of these when I started. Though by no stretch of imagination I can call my startup successful yet, I am glad that I started. This is a brain dump of what I learnt in these four months.
I have no money
Most of you would have been working in a company for a few years. Do you remember who called you the maximum number of times? Oh yes, the pesky loan companies. It is time to go one of them and take a loan. Of course this is a somewhat risky strategy, what if your startup does not work out? But then you must be trying to get an idea you believe in. And if you do not believe in your idea, who else will?
The second question is how much money should you take. I believe that you should take the maximum loan the bank is offering you. When your startup succeed, the penalty of a ten thousand rupees for prepaying would not be a big problem, but if you run into rough spots, it is always good to have cash reserves you can draw upon. The other option is to calculate what money would it take for you to become profitable, and double it. I took a loan of 4 Lac (which was the maximum the bank was willing to lend me), and pay back a little less 11 Thousand each month.
I have no co-founder
Leave your job and tell every one about this. This is a very strong indicator of your commitment to your idea. If you are willing to let the co founder work part time with you, a LOT of people would be interested.
I have no idea
Look around you. Do you find something broken? Or visit hundred random famous
sites in next two hours. Make a note of what is wrong with them. Decide fixing which will make you most money. You have your idea. Or you can go to 5 startup ideas on 42topics.com blog, and get a ready made idea.
Source control, bug tracking etc
In a company you would have your build systems, bug tracking system, source control system all set up. Now you can either pay a good deal of money each month on these utilities, or go to Assembla.com, which has a very generous plan with all these utilities built in for free.
Getting your app designed
If you are a programmer, you have no sense of color. Live with it. So you need some one else to design your UI/webpage. Go to 99designs.com there for a few hundred USD you can get a lot of designers competing to designs for you. You can choose from the designs and only have to pay the winning designer. If you want to save even more money go to Digitalpoint forum and create a competition, you will save some money but the results would not be as good as 99Designs.
Hosting your web app
A lot of people I know start with a dedicated server. You are not going to need a dedicated server for a long time. Save your money and rent a VPS instead. I recommend Slicehost if you are looking for a VPS. They have plans starting from 20USD. Or ask in your framework’s forum and use a shared hosting which specializes in your framework. For my Django sites, I use Webfaction.
Marketing your web app:
If you are a hacker, you probably do not know anything about marketing. Yet this is the part you can not outsource. Learn SEO. I recommend Aaron Wall’s SEO training program. At 100$ per month it is not cheap, but for me this has been worth the 100$ per month. If you are marketing to a Web2.0 crowd, try to get profiled on Techcrunch, Mashable and other similar sites.
I hope these ideas have been useful to you if you already are running a startup, or have got you excited about starting a startup in India.
Here is to more startups in India.
Awesome post …. Great work shabda
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Just a small correction maybe: The link to Digital Forums is probably wrong and should be http://forums.digitalpoint.com/ rather than http://forum.digitalpoint.com/
I have one doubt regarding the saying that “Take a loan of 4 lakhs and pay 11K as EMI” and “Leave your job and tell everyone about this” and “Though by no stretch of imagination I can call my startup successful yet”.
For all statements I have doubt that if your leave your job, still the startup is not successful, how to pay EMI? From where the money for paying EMI will come because still the startup is not successful.
I can’t be like that from the loan you also maintain your startup and also pay EMI from the same amount. If you take 2 – 3 years of loan, then it has to be that your startup should be profitable within these 2-3 years timeframe.
But the basic question remain, from where to pay the amount for EMI, till the startup is successful? Any answer…………
Shabda:
Should I say Bootstrapping demystified? Your personal example should prove to be a direction worth pursuing when a bootstrapper is in cross roads.
Hareen:
Say you took a loan of 4Lacs. Your EMI is 11K. If you cut back your expenses, it is possible to maintain your life style in 10K (It is bloddy hard though.) OTher startup related expenses are say 10K. So your burn rate is 30K/Month. With this burn rate you will last a little more than an year, but then I guess 1 year is long enough to build something which you can start chraging for, or have enough euers that you can raise Angel funding for.
Oh, and BTW, did I mention I am looking for co-founders?
Leaving job actually is a decision which you must take wisely. It may look hard to others, but after a few days you also might regret the decision (although I never did, I left my job at Yahoo! last year)
Good post. This is what we are doing with DeskAway – 100% bootstrapped. Initially it was slow but now we are seeing good results – mostly from seo, reviews, blogs which leads to viral marketing etc. There are so many marketing channels to try out – its worth the fun.
Personally I believe marketing is the key – not the product or anything else. With the web you can try out many things and change course if needed every week. With analytics, everything can be measured and tracked!
sahil..u shudnt say it publicly…(Personally I believe marketing is the key – not the product or anything else)
You may want to take a look at Linode Virtual Servers for hosting your web app: http://www.linode.com/
Just a passing thought… does startup always mean online Web 2.0 startup? I think the name of the post could have more appropriately titled if ‘web startups’ were there in the post title
Soham,
Very interesting point. Somehow every startup now gets linked to the web startup. I guess it is driven by the majority of the crowd that come here.
I see your stuff on your blog and it is interesting to see how you have managed to figure out a startup from finance. It is good stuff, I will follow you on ur blog !!
Interesting point Soham..to a certain extent, yes it’s for web apps…but few of these pts. can be applied to a regular startup as well..
The article has certain good links, but it is against the concept of bootstrapping , bootstrapping for me means “spending only what you earn”, this way you dont need large investments which are risky, and focus of your business is on earning right from the beginning, you need a self priming business model for that though. This article is misleading, if you go for above suggestions you will spend $240 for VPS in a year and few hundred for design. If you want to bootstrap you should be careful about spending.
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Nice post. U mentioned abt quiting ur job. I’m a fresher, with no work experience whatsoever. What would you suggest, work for some years or go for a startup..
That girls crazy! That’s why I am in love with her.
What can i say? I’m truly amazed with the grade of your writing skills
it is true.