Tuesday, 25 November 2008

Keeping it affordable – how to get started in a recession

Reshma Sohoni – CEO of Seedcamp gave a talk to students at Cambridge on Enterprise Tuesday. Her perspective was that on the whole startup costs had come down by a factor of 10 – especially in software ventures, because there was so much more open source available, many more tools, platforms and other forms of incubation.
For example – with infrastructure:
– Hosting - Amazon Web Services, Google App Engine, Cloud Computing in general
– Software, Design, Technology – Sun Startup, MSFT BizSpark, Open Source, Assembla.com, 99Designs, Creative Commons
– Office Space – Sun Startup, Silicon Roundabout (Moo), Work where you live
– Marketing – Learn SEO, Befriend the bloggers (Zemanta), Become an expert (Mobclix)
– Go virtual as long as possible and avoid office rent, furniture, and phone expenses
And a mindset that says – we need to control costs – be innovative and grow a business by being resourceful was the central message of Seedcamp.
So the examples included:
– Core team should include developers and business development
– Initial hires should be for equity + salary to cover rent and basic food
– Biz Dev and other advisors for equity not fees
– Product - Use your users to iterate and help build your product
– Rent instead of buy;
– Outsource what’s not core;
Her exception was with lawyers and accountants – which she she advocated getting good ones.

1 comment:

Lambrook said...

This all makes perfect sense not just for start ups but also for existing comapanies that are looking to avoid becoming high cost as they grow

its an important cultural issue for entrepreneurs to keep an eye on as their comapanies grow - to make sure that the people you hire realise that you don't want them to start spending money "like a company" (IE expensive solutions that a start up entrepreneur would avoid)

Richard Lucas
PS I attended an Ignite course in the sumemer of 2008 at CfEL, and recommend it very strongly