A new Infomercial

How to start a company with no money down

I had started this blog as sort of a joke/response to all the “we don’t need no stinkin VC” postings floating around. 

But an interesting thing happened along the way which should actually make a whole lot of people stand up and take serious notice.

Got an Idea? Passionate and Cocky? No money? No Problem. Step right up.

First, we need a computer. Nothing to it. I found 4 offerings ranging from 3 months, no payment/no interest, all the way up to 12 months of no payments, no interest.

Next we need an Internet connection. Since the previous “free” computer was a laptop, a little open wireless in the bldg or hooking up in the office, covers that item. A free connection, no problemo.

Now we need a domain name. Free? Absolutely. Head on over to http://www.registerfly.com/ and sign up for a .be domain. It’s Belgium, beats me, but the Registerfly guys are doing them, free, for the first year.  And before all you Robert Scobble haters/lovers jump on this, fuhgettaboutit, I already reserved scobblewanna.be. It’s a holiday gift for mini-microsoft. But, I digress.

How about some tools. Go with some great free tools from Microsoft or grab any of the zillion open source tools in AJAX, Ruby, C++, Cobol, or whatever floats your development boat.

And of course, a free blog to talk about the product, have sign ups for the RSS feeds, get beta announcements, etc.

To this point we’ve spent no dollars. That’s zero euros, zilich pounds, nothing.

Let’s say you are rusty in the coding department. Two words: Sweat Equity and one source: Interns/Co-Op Students. 

I did quick calls with some contacts at York University, The University of Toronto, The University of Waterloo, and The University of Washington.  All of them had programs and were eager to offer up bodies in exchange for real world opportunities. In particular, the University of Waterloo has an entire program dedicated to taking ideas and running them through the whole process of plans, code, prototypes, etc.  It’s pretty good and, of course, is free.

Staff, infrastructure, tools, equipment and a domain name are all a pretty good start for zero capital.

Just add some passion and/or cocky desire to change the world -n- off you go.

Don’t nit pick, there are flaws/holes, etc, in all of this because there is the larger point of what it takes to get started and it is certainly not all that much.

Personally, I think the VC community might want to brush up on the customer relations stuff. Especially the parts about being nice, returning phone calls, email, etc.

On the other hand, maybe in addition to cash, we can throw in some steak knives at every closing.

Comments

[Gavri Fernandez]

Web hosting space?

[Rick Segal]

Gavri,
If you were making the point about needing a web hoster to handle downloads and other things, good point. I was making the point, tho, about using a blog, which is free, to basically get things started. With no money, you could email people a beta link to that free box you got with your web service running on it. If you were making a widget/gadget, you email it to em. Remember, this exercise was to make the larger point that for very very little cash, you can go a very long way.

Thank for you stopping by.

[the head lemur]

I'm gonna hold out for the light bulbs in addition to the steak knives.

[Shaded]

Thanks for the resources. Never thought of using students to change the world but, the more I think about it, the more it makes sense.

Regards,

Shaded

[Stuart MacDonald]

Great point you are making, Rick. I couldn't agree more. On my last venture, I went into it thinking that I would just not lose money but would live within my means and scale as the business could afford it. Now, nobody told me I had to do that - I was in a very fortunate position of having access to capital that would have enabled me to dig a big hole - but I didn't because I just didn't think I would sleep well if I did.

We operated to breakeven within the quarter, spent more on the fly as the business allowed it, and scaled as the business could afford it. Now, in many ways we were fortunate to be sure, but it proved to me that having that kind of attitude going in can truly shape the outcome coming out.

Oh, and the venture worked out just fine :)

- Stuart

[vishi]

Whats missing?
Sustainable risk management stratergy. Can you guarentee that the interns will deliver? For how long?

[Rick Segal]

Vishi,

Thanks for stopping by. The point of my exercise is to get people thinking about what you can do to get started, rocking along, etc. Obviously, you probably wouldn't want to have an all intern, all the time, company but, I have portofolio companies that are using this process to grow talent and are happy.

By the way, we are looking for program managers, come to Canada!

[lush]

I've never found the domain name, hosting or even hardware the challenge. It's about keeping food in my belly and a home over my head while I develop something new that's the real challenge.

[Ray]

Great post, Rick! At the beginning most of us should all be getting started on the cheap rather than calling VCs so we can do the start on someone else's nickel. If costs are so low at the outset, seems the answer for VC is around stage - let the entrepreneur start to build something, then come in later, when growth mode induces capital intensity.

As for lush, the answer seems to be "don't quit your day job." Building the entrepreneurial venture is about generating equity and net worth down the road, almost always at the expense of income today. Keeping expenses down (per Rick, Joe Kraus, etc) is good, but when pre-income, or when the enterprise cannot yet pay the founder a living wage, getting income from another source is key. Job, solo consulting, whatever can pay the bills until the business turns the corner.

[Phil]

Rick: Good thing the domain name was free: there's only one 'b' in 'Scoble.' ;-)

[Rick Segal]

Thanks, Phil. I caught it and corrected the registration. Whew!