Startup Tips: How to save money and increase productivity

March 10, 2008
By sinha

The two serial entrepreneurs from Silicon Valley, Jason Calacanis and Mike Arrington have shared a few wonderful tips on how to save money as well as increase productivity for startups.

Though I don’t necessarily agree with all of the points made (for e.g. buy mac computers), but nevertheless, here is a summary of few very very relevant stuffs:

cut cost save money[Money Saving Tips]

  • Don’t buy a phone system. No one will use it – instead reimburse mobile bills (saves tax)
  • Don’t buy everyone Microsoft Office–it’s too much money. Put Office on three or four common computers and use Google Apps.
  • Don’t waste money on recruiters. Use our job board :)
  • Buy cheap tables and expensive chairs.

[Productivity Tips]

  • Fire people who don’t love their work.
  • Buy your hardest working folks computers for home (better still, give them a laptop).
  • Buy everyone lunch four days a week and establish a no-meetings policy. Going out for food or ording in takes at least 20-60 minutes more than walking up to the buffet and eating. If you do meetings over lunch you also save that time. So, 30 minutes a day across say four days a week is two hours a week… which is 100 hours a year. You get the idea.
  • Outsource accounting and HR—such a no brainer
  • Get an expensive, automatic espresso machine at the office.
  • Allow folks to work off hours (as well as from home). Commuting sucks and is a waste of time for everyone.

Well, most of the Indian startups that I know run on Google Apps and rely heavily on freebies, i.e. -

  • OSS (LAMP), CMS tools (Joomla/Drupal) for development.
  • Skype for communication.
  • Meeting with vendors/prospective partners at CCDs (Cafe Coffee Day) instead of posh restaurants.

Few points I’d like to make:

  • Start a blog – an active one and try to get close to the community. If you do a good job, you will never need a PR firm.
  • Use events like Barcamps to meet prospective customers/employees, and of course to (shamelessly) promote your product (in a subtle manner)
  • Never ever hire a HR person or advertise in any newspaper (for e.g. ToI Ascent etc).

Few debatable topics:

  • Incubation center?
  • Outsourcing the dev part to third-party?

What else would you like to add?

Read TC and Calacanis post

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               About the author - Ashish Sinha is a Startup Mentor/Product Strategy Coach, and the founder/chief editor of pluGGd.in. He has launched/managed couple of products (consumer as well as enterprise) in US and India, and now consults with startups/small businesses on their product/media strategy. He can be reached at: ashish (at) pluGGd.in [+91 98452 06443]
  • satish
    how to make money and utilise it in a correct way.
    never give up your heart
  • When we started off, we were using https://freepository.com/ for providing SVN hosting. At 8$ / month, it was a big relief (at a low cost), considering all of us were working from home and we didn't have to sacrifice one of our laptop to be the code hoster!
  • VeeJay
    Very interesting post indeed. I do agree, that Basecamp is a good product, but I'm really disappointed that its creators don't like to add new features. That was the reason why my team looked for another tool. Now we use Wrike. Anyway, it's always useful to know about experience of other startup owners.
  • @Bhaskar - Excellent Points.
    Yes, organizing unconferences etc is way better than buying adwords. Infact it also gives you an authority over the topic
    I really liked the 3rd point that you made - travel when the trafic was least. Spending huge amt of time on traffic is just not justified - bad for productivity.
    Thanks for sharing the funda.

    Ashish
  • hi there ashish,

    great suggestions from Jason. We're entering a new phase in our startup ourselves, and here are some of my thoughts.

    1) sharing office space : until recently there were 3 startups at our office, sharing the rent,wifi,electricity,fridge and even a common room to crash. it also meant having different opinions and also made a great place to host meetups :) We hope to do the same wrt our recent relocation to pune.

    2) marketing : we felt it was worthwhile sponsoring/hosting a few small unconferences/meets than attending huge CXO style ones ,to make an impression. it also helped in showing the energy while making hires later on.

    3) we traveled when traffic was the least, and ended up feeling a lot better and possibly more productive than the rush hour lot.

    4) zero-sum partnering with other startups : it could be anything from co-branding / to two-way referral campaigns with "other startups" for a win-win and obviously non-competing relationships

    Keep Clicking,
    Bhasker V Kode
    hover.in
  • You can also give mingle a shot.
    http://studios.thoughtworks.com/mingle-project-...

    its pretty cool and has some amazing features. Its free for small teams I think. Check it out
  • Jai
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  • Don't waste money on PR - I agree completely. Too many start-ups going to traditional PR companies and paying them about 50k a month as a retainer.

    Your actually better off taking the money and making paper planes.. atleast you learn something!
  • I'm not sure why nobody uses the term "Scrum" which is actually that everybody is talking here about -- brainstorming during lunch session.

    http://www.brajeshwar.com/2006/scrum-the-hyper-...
  • Interesting! Basecamp, to me is a good product but is too constrained to meet everybody's requirement.
    Let me try out the apps you guys suggested!
  • Prateek,

    I agree the lunchtime is a good time for team bonding etc. should be a no-brainer when it comes to start-ups providing free lunches. However ground realities are different. Some of the problems you face are:
    1. None of the good caterers are willing to provide you with lunch for a small number
    2. After a while the team gets bored with the lunch and slowly ppl start opting out, and when the number is small it becomes difficult to manage this whole affair

    This is from my personal experience. Therefore while we still are looking for a good lunch solution we are doing free breakfast :) Everyone seems to be happy with it and works well for us too.

    Ashish, on project tracking we keep moving from one to another regularly to try and see what works best for us, as our needs keep evolving and changing. Right now we are trying out Redmine (www.redmine.org), ROR based tool , so far looks good.
  • I was using basecamp for a little while .. but it was not working out well. I would have a list of task, but with no notion of critical, good to do .. etc etc .. the discipline was not coming in

    Lately I have moved to trac. Its open source .. though I have not used the svn integration much, I like the intergrated wiki and ticket system approach. Atleast it helps me prioritize well and keep my thoughts in order :)
  • Interesting point, Prateek.
    Here is a general friction that I have seen @ startups - If you ask employees to submit their 'task/status report', people are pissed off like anything!
    Infact, I would say standing meeting helps a lot - 5-10 mins a day.

    As far as tracking tasks are concerned, one has to some app. Which one do you guys use?
  • I strongly agree with the buy your team lunch point. I can never understand why companies would want their employees to go and hunt for food, waste time, money and more importantly the best brainstorming/bonding time.

    Office lunch tables are the best reason to work out of an office IMO.

    Also agree about open source. Products such as open office and web applications like google apps are a no brainer for startups

    Also I feel, one must use some kind of tool (say trac) to track your work ... because as a startup its easy to lose focus. Whats your take on that ?

    Regards
    Prateek
  • The "Buy Macs instead" is more true in US because it is too costly to hire technicians whereas in India, we have bunch of people who can come on-call at your place to fix your PC. So, yes, "Buy a Mac" would be counter-saving in India when a Mac will cost about 30% more than the one in the US. Buying a PC + 5 years of AMC will still be cheaper in India.
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