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5 Financial Rules for Startups

19 points by jasonlbaptiste 17y ago

brown9-2 17y ago
Everyone one of this article's "rules" looks like this: 1. In the words of Evan Williams... 2. According to Jason Cohen... 3. This advice from Michael Arrington of Techcrunch... 4. According to Jason Calacanis... 5. Those are the words of Mark Cuban... A true list of N things ...
zaidf 17y ago
Weird to read an article that stresses making money but is anti-marketing. I understand most marketing is bloated. But even the best products need GOOD marketing to bring in the dough. The solution is not to be anti-marketing. Rather, be pro revenue focused marketing. Unimpressed.
thaumaturgy 17y ago
Less than two years ago, I bootstrapped a consulting startup, by myself, and made $300 in my first month. I had one client. My goal this year was to hit $3,000 a month by the end of the year; I hit it in June. I'm now regularly picking up new clients -- still entirely by word-of-mouth -- I have two people working for/with me, and so far the growth isn't showing any signs of slowing down. While these aren't very impressive numbers, they're not too bad for one guy with no resources starting out. It's been a good exercise in non-stop business judo. So, according to me: 1: Don't waste your time reading crap like this. You won't learn as much from it as you will if you just go out and work your ass off. 2: Oh yeah, working your ass off: do that, a lot. It's been hard off and on, but I also keep getting better at it, and now any potential competitors that come along are going to find themselves facing off against a human dynamo. 3: I haven't figured out what #3 is yet. I've pretty much just done the first two. What comes next depends too much on the individual and their business and their market, so it's impossible to come up with one rule that works for everyone. Having tried out a couple of different business "coaches", I've found them to be completely unhelpful. So: nobody should be telling you what to do, least of all me.
- quizbiz 17y ago
  How do you pitch consulting? What exactly do you consult? If I may ask.
  - thaumaturgy 17y ago
    I haven't had to pitch, for the most part, and that's definitely my weakness. I really suck at it. One of the nice things about word-of-mouth growth is that people come to you, and they've already heard that you're good, so all they want to know is how much you cost and when you can come out. For business mixers and the like, I have some pretty fancy business cards that cost me about $.80 apiece, but they've really paid for themselves in helping with that whole first impression thing. I do I.T. consulting. In a nutshell, I'm one of the few guys that builds and administrates networks and computer systems, can recover data from drives (usually), clean up your nastiest viruses without formatting your drive, install and troubleshoot IP telephony, as well as do software development, reverse engineering, and all kinds of other stuff. Up until recently, I had days where I was a telephone technician for a couple of hours, a network admin for a couple of hours, and a programmer for the rest of the day. We've just started a new one-obligation-per-tech-per-day policy, so that's gotten a little easier. I'm pretty much an affordable on-call I.T. department for anyone that needs one. Hey, wait-a-minute: that's not a bad pitch! writes it down for later
    - patio11 17y ago
      I think if you charge more, you'll find that people become automatically more respectful of your time. You might also find that you deal less with difficult clients who prioritize "affordable" (i.e. dirt freaking cheap) over everything else, and as a result have a million problems which they expect you to solve for $20. ("What? That's a lot of money! I could get my brother's cousin in here for $15, its a generous offer!")
      - thaumaturgy 17y ago
        You are right, and I don't disagree, and I've even had a couple of clients tell me that I should be charging more -- the usual number they offer is twice my usual rate ($35/hr for students; $39/hr for home/home office; $45/hr for businesses). However, I started doing this in part because I was extremely frustrated with the various expensive I.T. support companies and draconian vendor support contracts, and because there's a huge under-served market of people who just need help with stuff they don't understand, and can't afford to pay Geek Squad's silly rates. I wanted to be part of the solution, instead of adding to the problem. For the most part, we have a pretty good relationship with all of our clients. There are occasional frustrations, but most of that is due to our own growing pains. We just "fired" a client recently after a large project went sideways and we ended up getting a bit soaked on it; we won't hesitate to do that in most cases, and I think it helps keep our business relationships healthier.

Everyone one of this article's "rules" looks like this: 1. In the words of Evan Williams... 2. According to Jason Cohen... 3. This advice from Michael Arrington of Techcrunch... 4. According to Jason Calacanis... 5. Those are the words of Mark Cuban... A true list of N things ...

zaidf 17y ago

Weird to read an article that stresses making money but is anti-marketing. I understand most marketing is bloated. But even the best products need GOOD marketing to bring in the dough. The solution is not to be anti-marketing. Rather, be pro revenue focused marketing. Unimpressed.

thaumaturgy 17y ago

Less than two years ago, I bootstrapped a consulting startup, by myself, and made $300 in my first month. I had one client. My goal this year was to hit $3,000 a month by the end of the year; I hit it in June. I'm now regularly picking up new clients -- still entirely by word-of-mouth -- I have two people working for/with me, and so far the growth isn't showing any signs of slowing down. While these aren't very impressive numbers, they're not too bad for one guy with no resources starting out. It's been a good exercise in non-stop business judo. So, according to me: 1: Don't waste your time reading crap like this. You won't learn as much from it as you will if you just go out and work your ass off. 2: Oh yeah, working your ass off: do that, a lot. It's been hard off and on, but I also keep getting better at it, and now any potential competitors that come along are going to find themselves facing off against a human dynamo. 3: I haven't figured out what #3 is yet. I've pretty much just done the first two. What comes next depends too much on the individual and their business and their market, so it's impossible to come up with one rule that works for everyone. Having tried out a couple of different business "coaches", I've found them to be completely unhelpful. So: nobody should be telling you what to do, least of all me.

quizbiz 17y ago
How do you pitch consulting? What exactly do you consult? If I may ask.
- thaumaturgy 17y ago
  I haven't had to pitch, for the most part, and that's definitely my weakness. I really suck at it. One of the nice things about word-of-mouth growth is that people come to you, and they've already heard that you're good, so all they want to know is how much you cost and when you can come out. For business mixers and the like, I have some pretty fancy business cards that cost me about $.80 apiece, but they've really paid for themselves in helping with that whole first impression thing. I do I.T. consulting. In a nutshell, I'm one of the few guys that builds and administrates networks and computer systems, can recover data from drives (usually), clean up your nastiest viruses without formatting your drive, install and troubleshoot IP telephony, as well as do software development, reverse engineering, and all kinds of other stuff. Up until recently, I had days where I was a telephone technician for a couple of hours, a network admin for a couple of hours, and a programmer for the rest of the day. We've just started a new one-obligation-per-tech-per-day policy, so that's gotten a little easier. I'm pretty much an affordable on-call I.T. department for anyone that needs one. Hey, wait-a-minute: that's not a bad pitch! writes it down for later
  - patio11 17y ago
    I think if you charge more, you'll find that people become automatically more respectful of your time. You might also find that you deal less with difficult clients who prioritize "affordable" (i.e. dirt freaking cheap) over everything else, and as a result have a million problems which they expect you to solve for $20. ("What? That's a lot of money! I could get my brother's cousin in here for $15, its a generous offer!")
    - thaumaturgy 17y ago
      You are right, and I don't disagree, and I've even had a couple of clients tell me that I should be charging more -- the usual number they offer is twice my usual rate ($35/hr for students; $39/hr for home/home office; $45/hr for businesses). However, I started doing this in part because I was extremely frustrated with the various expensive I.T. support companies and draconian vendor support contracts, and because there's a huge under-served market of people who just need help with stuff they don't understand, and can't afford to pay Geek Squad's silly rates. I wanted to be part of the solution, instead of adding to the problem. For the most part, we have a pretty good relationship with all of our clients. There are occasional frustrations, but most of that is due to our own growing pains. We just "fired" a client recently after a large project went sideways and we ended up getting a bit soaked on it; we won't hesitate to do that in most cases, and I think it helps keep our business relationships healthier.