11 Golden Tips To Cut Costs When Launching a Startup
June 02, 2007 |
This post has been written by Dario D'Onofrio, author of two blogs about Web 2.0 startups: Businesshackers and Amazing Startups. Check these blogs for more startups reviews and tips.
Launching a startup can be very expensive. In the last few years however the cost of launching innovative projects and web startups in particular has dropped dramatically. What you usually need to spend money on is: hosting, domain registration, help from friends and a "big garage". What is really important is to be patient and find a niche for your service or product. Many people get discouraged because of entry costs in markets and costs of creating and launching a startup. So let me tell you how you can cut costs easily:
1. Look into projects according to your background. The best way to save money is to have a proper knowledge of the industry and the products you are going to provide. If you are an engineer try to stick to your background; biochemistry or astronomy will probably be something to avoid especially if you don't have anyone with such knowledge in your company. The key to success is competitive advantage which derives from unique abilities and skills.
2. Ask your family and your friends to comment on the project. You family and friends always tend to be subjective, but their advice is free. Asking "What do you think about it?" will allow you to identify potential opportunities and serious mistakes. This could be vital.
3. Observe competitors before spending money. This is something that I always stress. Don't create another YouTube or Google, focus on innovation. A good solution is to avoid cloning, but invent something new every time. The only exception that comes to my mind is cloning from one country to another. Some such sites are very popular and it often turns out to be a good approach to business.
4. Keep your ideas secret. It usually takes 2-3 weeks to clone a project. Your ideas are the most important thing in the whole company. Never share all your ideas or you will end up with nothing. Competition is fierce and big players in the industry are always one step ahead, so be careful.
5. Negotiate with suppliers. Cutting costs by negotiating with suppliers is extremely important. Your bargain power at the begging is very low but if you are cunning you can find special opportunities even in competitive markets.
6. Don't tell media what you are doing in the first stage of your project. This point is connected with point 4. If you tell media about your ideas they will be cloned. Marketing comes next, first concentrate on the product.
7. Be flexible. If you see that there is something to be changed, change it. There is no point being stubborn. Be critical and you will be able to optimize your product or service.
8. Spend more time thinking than doing. It doesn't matter how much time you spend working on a bad project. It's better to work an hour on a very good idea than 24 hours on crap. "Quality is the king".
9. Be ready to give up when everything goes wrong. There are thousands of projects to look at. This point is vital to survive. Risk diversification and careful project selection will take you out of a major problem. If something goes wrong, switch to something different.
10. Run a blog to keep in touch with users. Keep in touch with customers. It doesn't matter how you do, but they have to know that you are able to support them in case something goes wrong.
11. Don't hire, outsource instead. It is always a good idea to focus on the core business. If you need to have something done by someone else, especially from time to time, try to avoid hiring.
Cutting Costs is Key – Here’s how…
Dario D’Onofrio guest blogs over at Profy.com today, sharing some of his experience with the rest of us. Every business on this planet has two golden rules – Cut costs & Higher profits. No matter how big you get or how small you start, you a…
Very useful tips, thanks for the summary. I like #9 the most. This is the reason why you should always have a couple of ideas/start-ups going.
I like #10. I have already been running a blog blogging about my entire startup process before I even start my private beta testing. It is a way to build early adopters.
Yes, blogging for the target audience seems to become a very popular way to promote your future product. The blog has a good chance that you loyal readers will evolve into loyal users of the application.
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