Startup 2.0
Starting a new business is a lot easier now than back in 1998, when I started Fireclick. Set aside the fact that I have more experience, the cost of doing business is nowhere near what it used to be. A few examples:
- Phone and internet: today you can really good office connectivity for $75/mo, with VoIP limiting your bills to $50-70/mo for a 6-8 people office (we use Asterisk, the open source PBX for phone switching).
- Office rent: costs are about 40% of 1998-2000’s (Silicon Valley)
- Marketing costs: this won’t be of any surprise to anyone, but all the pay-for performance marketing programs, getting in front of your prospects is more a science than an art.
- Outsourcing: there are now lots of options for Web site development, specific engineering projects, QA, Operations. Non-mission critical tasks are easy to outsource for cheap.
Clearly there are exceptions (medical insurance costs, local Silicon-valley wages, etc), but overall, things have changed, big time. Entrepreneurs are the big winners here, since they need less capital to get off the ground.
Xavier,
Joe Krause, one of the founders of Excite, and new co-founder of jot.com (secure wiki hosting), had a great post about the trend toward lower startup costs.
Check it out, it’s a great addition to your thoughts: http://bnoopy.typepad.com/bnoopy/2005/06/its_a_great_tim.html
Comment by Timothy Seward — February 13, 2006 @ 6:44 am
Low costs, check out http://www.ofbiz.org, I was amazed at how easy it is to open a store now online.
Comment by Gus — February 13, 2006 @ 10:02 am
While Asterisk is a great product - you have to ask yourself “are you a phone company?” or a business using a phone system. For my firm the question was easy. While Asterisk is a great work and many have found great success, we decided to sink $5K into a new AllWorx VoIP system and $200 or so each into really nice VoIP handsets. It was more money, but we spent only about two hours configuring things - and that was essentially a ready-to-go office system with remote users, VM, call queues, email notification, etc. I’ve heard of friends spending countless hours with Asterisk - and that time was way more expensive than $5-10K. Just my pre IPO $0.02.
Comment by David Geller — February 20, 2006 @ 4:57 pm