4 ms·

This is a silly and myopic article. That sounds harsh but I can't think of a nicer description. Moreover, the author himself describes doing it for far less ($

by rmah 8y ago

This is a silly and myopic article. That sounds harsh but I can't think of a nicer description. Moreover, the author himself describes doing it for far less ($10k). I don't mean to be a curmudgeon here, but IMO, I think articles like this hurt more than help. Tossing out a not low but semi-attainable number is just clickbait. In reality the amount of money varies by many orders of magnitude. It can be as low as $1k (your basic legal costs and some cheap hosting) to as high as $100mil (you need facilities, manufacturing, warehousing, retail channels, etc, etc). Each business is different and how much you will need to "get to sustainability" will vary based on the market niche, strategy, competition, positioning, market landscape, timing, regulatory burdens, etc, etc. Hell, even for something fairly well defined business concept like "start a bar in a medium-sized midwestern US city" the costs can vary by an order of magnitude depending on the specifics. Better advice: research your market and plan out what you think you'll need. Estimate the various expenses that lead to revenues, including the time-delays between when you spend and when you receive funds. Then do it again for a less-than-rosy scenario. Finally accept that your guesstimate is probably wrong and go for it anyway!

jprocopio 8y ago
Actually I didn't say I did it for $10K, I said I'd DO it for 10 dollars. I get you. I'm talking about the difference between calling something a company and building a sustainable company from zero. $250K is arbitrary because any number would be arbitrary, as you note, but it's also a good minimum baseline to shoot for. Any one of the caveats I discuss in the article could change the number or how that money is aggregated or how long it takes to spend it.
- icedchai 8y ago
  You can't say 250k is a baseline unless you know what sort of company you're building. For a services / consulting company where you're getting revenue upfront, it is probably more than enough... For a product company, it may be way too little.
  - scarface74 8y ago
    For a consulting company where you get revenue up front, what would you need besides: - legal fees - an accountant - setting up a domain with a WordPress landing page and an email provider. - computer equipment (which you probably already have)?
    - mgkimsal 8y ago
      insurance.
      - icedchai 8y ago
        To be fair, you don't really need that. I did software consulting without any insurance for almost 20 years. At one point, I had a client who required it as terms of a subcontract, so I had to get it.
    - icedchai 8y ago
      Yes, I should've said definitely more than enough!
    - AstralStorm 8y ago
      You missed the black hole called marketing or an agent. Landing page alone will get you nowhere real quick. You might get a lucky client or a few by posting samples. Maybe. But would that even be sustainable? It would you just end up hired and not really a consultant? Network effects are also unreliable on a small scale. Plus networks need a bit of care that takes time and work.
      - scarface74 8y ago
        I could see myself outsourcing that. I’ve worked with plenty of local recruiting companies from both the hiring side and looking for a job. I would probably setup a win/win partnership with them. I can guarantee them qualified developers, and they can find clients and get a cut. Recruiting companies usually will do either 1099 Corp to Corp contracts. Of course as you build your own clientele, you hope you lessen your need for external recruiters.
- rmah 8y ago
  In between Automated Insights and my current startup Spiffy, I built Teaching Startup with $10,000 out of my own pocket, 60 hours a week of sweat equity [...] Past tense implies that you did it (and it's awesome that you did)... More to the point, if "$250k is arbitrary because any number would be arbitrary" then it's not a good minimum baseline to shoot for, it's just a random number. Better to actually think through how the business will work, what resources you can draw upon, what your expenses will be, how your revenues will come in, etc. And then estimate your financing requirements based on the specifics of the business.
  - jprocopio 8y ago
    Ah. I see the distinction now. That company failed though, so $10K was not enough, that was stuck in my mind. Thanks for the tip.
deleted 8y ago
[deleted]

by rmah 8y ago

jprocopio 8y ago

Actually I didn't say I did it for $10K, I said I'd DO it for 10 dollars. I get you. I'm talking about the difference between calling something a company and building a sustainable company from zero. $250K is arbitrary because any number would be arbitrary, as you note, but it's also a good minimum baseline to shoot for. Any one of the caveats I discuss in the article could change the number or how that money is aggregated or how long it takes to spend it.

icedchai 8y ago
You can't say 250k is a baseline unless you know what sort of company you're building. For a services / consulting company where you're getting revenue upfront, it is probably more than enough... For a product company, it may be way too little.
- scarface74 8y ago
  For a consulting company where you get revenue up front, what would you need besides: - legal fees - an accountant - setting up a domain with a WordPress landing page and an email provider. - computer equipment (which you probably already have)?
  - mgkimsal 8y ago
    insurance.
    - icedchai 8y ago
      To be fair, you don't really need that. I did software consulting without any insurance for almost 20 years. At one point, I had a client who required it as terms of a subcontract, so I had to get it.
  - icedchai 8y ago
    Yes, I should've said definitely more than enough!
  - AstralStorm 8y ago
    You missed the black hole called marketing or an agent. Landing page alone will get you nowhere real quick. You might get a lucky client or a few by posting samples. Maybe. But would that even be sustainable? It would you just end up hired and not really a consultant? Network effects are also unreliable on a small scale. Plus networks need a bit of care that takes time and work.
    - scarface74 8y ago
      I could see myself outsourcing that. I’ve worked with plenty of local recruiting companies from both the hiring side and looking for a job. I would probably setup a win/win partnership with them. I can guarantee them qualified developers, and they can find clients and get a cut. Recruiting companies usually will do either 1099 Corp to Corp contracts. Of course as you build your own clientele, you hope you lessen your need for external recruiters.
rmah 8y ago
In between Automated Insights and my current startup Spiffy, I built Teaching Startup with $10,000 out of my own pocket, 60 hours a week of sweat equity [...] Past tense implies that you did it (and it's awesome that you did)... More to the point, if "$250k is arbitrary because any number would be arbitrary" then it's not a good minimum baseline to shoot for, it's just a random number. Better to actually think through how the business will work, what resources you can draw upon, what your expenses will be, how your revenues will come in, etc. And then estimate your financing requirements based on the specifics of the business.
- jprocopio 8y ago
  Ah. I see the distinction now. That company failed though, so $10K was not enough, that was stuck in my mind. Thanks for the tip.

deleted 8y ago

[deleted]