BlipADeal – Daily Blipp'n Deals

So your sitting with friends at a bar, your in the shower or your driving to work and that idea hits you. You think about the idea a bit more (on and off) and the itch to scratch it gets worse and worse as time goes on. One weekend you say “screw it, i’m going to stay inside to code today” i’m not going to go to the beach i am going to stay inside and hack this mofo up and see where it goes. You hack away for 4-5 hours and you really like were its going. A few weeks pass by and it becomes the dominating idea in your head and on that one fine day you think “hmmm I like this, maybe i should make a business out of this”.

Once this happens and you really take the side project seriously, the question about quitting work to do it full time isn’t going to be too far away. So, when you finally do get to that decision how do you know its the right time to quit the faithful 9-5.

The real answer to that is you never know, because the right time to quit work is when you know 100% your going to get paid in your new venture and that you will succeed without a doubt, kinda like when you leave one job for another and all you have are only a few unknown variables ! That’s the right time BUT that’s hardly ever the case when your at the crossroads of deciding to quit work or not for your startup. Of course there are exceptions and if you are one of those few that managed to get capital, have a killer user base or your already nicely profitable before leaving the 9-5 then your definitely ready to leave. We weren’t in this situation so the decision for us wasn’t as easy or crystal clear.

So what are the key things you need to take into consideration ?! Everyone’s priorities are different but I think here are the points we considered

• You need to be relativity stable financially.  By this i don’t mean having massive savings but enough to get you to where you want to go and enough that if things go pear shaped your not going to live under a bridge. Its different for everyone based on their stage of life but it could be 20K, 50K, 100K, 200K, it all depends. By financially stable it also means that you don’t have massive debts to service. If your married or have a partner who is understanding and can cover things in the time you quit work to make a push for your startup thats ok, but if your servicing things by yourself and if you know there will be no income for X period of time you need to make sure there are no big debts to service otherwise you will be worse of then when you initially started by a great deal and you don’t want this situation.

• You need to make sure your mentally prepared. This preparation has many parts to it:

• • The first part is to prepare yourself to treat your startup as seriously as you did when you were working full time. This means take when you start, when you finish, when you screw up and when you succeed seriously. You are your own boss now BUT treat it with the same (or more) respect as you did when you had a boss that watched what you were doing and would kick your ass if you screwed up or rocked up to work 5 hours late everyday. This is key cause if you don’t have this discipline you will get restless and start looking for work after a few weeks of “giving it a go”.

• • The second part is to prepare yourself to deal with the reduced income that you will receive. You might be able to make some money on the side, get some interest from savings etc etc but it wont be the same as your salary. If this is true then prepare for that cause it means you will probably have to cut down on certain spending that you didn’t even think about when you had that nice 6-figure salary at your faithful 9-5. For me and the team cutting down wasn’t so big and issue cause we are cheap anyway but for some it might be a big transition so prepare for this.

• Make sure you know what your going to work on and you know what the goals of everyone on the team is going to be. I have heard how some people quit work before even having an idea or having an idea without seeing if that idea will work via some code/prototype. Personally i don’t know how this works ?! what do you do, sit under a tree while your earning zero money and wait for the proverbial apple to fall on your head ? I guess it might work for some people but my suggestion is, have your idea, have some code written, even launch a prototype while your still at work and earning money and see if things float. If they do and your co-founders are ready to quit with you make sure each of their tasks are clear. Having unclear tasks, and having someone idle can cause tension, specially if they quit work to work on the startup only to find out that the bulk of their work is further down in the life of the startup or there actually isnt much for them to do.

• How does work feel, have you lost complete interest at work, can the team still make progress while still working (as in) your not to tired to code when you come home. If your answer to the above questions is  yes and no then its time to leave. We felt work was just becoming a drag and because of this we felt less energy to work on the startup after the 9-5 even though we still were. We also felt that we couldn’t move fast enough and at this point it was becoming damaging to our startup so we decided this was the point we had to leave.

• You need to see that glimmer of hope after you do your few initial releases. You need to see that potential. By this i mean, you need to sit in your time machine and see yourself coding feature X, feature Y, feature Z and that one of those features, or a combination of those features will lead you to where you want to be. It might be that you get a few signups, a good amount of hits, good download rate, your turning in that bit of money to pay for your server costs, basically anything that gives you hope of succeeding. If you can see this then its also a good indicator that your ready

So to recap – these are the main points we went through. These ideas are based on our situation and obviously it varies between every individual. I thought it was worth discussing some of these points because making the step to being full time on your startup is a big one, especially if you do have other responsibilities but still have that burning urge to work on your own thing. Its important to consider whats going on in your life so that you can manage your situation and still work on something your passionate about. Its also a big change if you have been working for 8+ years and used to earning a steady income so the mind games and mind set changes are things you need to consider.

Just a few additional points though. Since I left work and started working on software that I really enjoy day in day out along with the additional time i have before my daily work starts, I can enjoy doing things that i have been wanting to do for a very long time. It really is rewarding even though its hard work and i can only imagine how it would feel for people that have reached their goals and as a result can enjoying life doing things that they really want to do without the constant thought of “what kind of curve balls” the startup life will bring tomorrow.

Hope our team reaches that one day …

When your bootstrapping your startup there is really only one (on going) goal that you should have and that goal should be to ensure that your runway is as long as possible to give you ample time to take off. Take-Off could come in many different forms that is specific to the team.

One of the things that i have come to realise as a bootstrapped startup founder is that when your bootstrapping with very limited funds, you can prolong your runway using varying different methods but by doing so you get the same effect as when you stretch an elastic band. Yes you can make it longer so you can travel a longer distance forwards, but the longer you pull it, the thiner the width gets. This simply means its easier for you to fall of the edges.

To relate this back to the startup world it basically means you can prolong the amount of time you can keep going with your startup but you have to make sure you don’t make any costly mistake which will lead you to fall of the edges. As you stretch this time longer and longer you have less room for errors and mistakes.

Errors and mistakes can come in many different forms and in many cases you dont realise whether the choice you made 2 days ago is a mistake until you look back on it from a much further future point in time. So even though spending as little cash as possible might look like the right choice for prolonging your runway and being able to put food on the table for a longer period, you may in effect have made a costly mistake that will only show its self at some future time after you have had some time to reflect or to think about why things didn’t turn out as expected .

At the moment we face these “should we or shouldn’t we spend” decisions everyday and some of them include

• How much money to allocate for additional Adsense and Admob campaigns and experiments

• How to format our campaigns so that they are clear, concise, direct and have the biggest impact to ensure that the allotted funds are not evaporated in a matter of minutes without spending to much time or spending money on a professional marketer (at this point in time)

• How many additional servers we need as the user base grows and what should the size of those servers be to give the right kind of balance for adequate performance

• Whether a certain piece of documentation needs lawyer eyes or whether we can get away without the official rubber stamping

• What domains to buy to prevent domain squatters (yes we would like to get all the blipadeal ones but some are just not worth it)

• These are just a few but the list goes on and on …. and there are new ones everyday

Being bootstrapped, addressing even very small issues such as that listed above isn’t an easy task because there are many of these decisions and the costs all add up. We must consolidate, compromise and in many cases do much of the legwork ourselves before we contact a third party for additional help.

What we have realised is that it all comes down to substituting your time for the money you would have spent and only spend money on things that are necessary. For example, lets look into a case were we have two important items to consider,

1. The healthy food that you usually buy that is a little more expensive then your average bowl of ramen and
2. Paying a designer to get part X of the site completed.

If your short for dinner money (and its important to you to stay healthy and eat good food) do as much of the design for part X that you can and ONLY once you can HONESTLY say you can’t do anymore without professional assistance should you pay for the rest of the work to be done.

In our world money and time are interchangeable so if we spend 1 day getting a mockup done ourselves of a certain design that we like we can save a lot of time when we finally do call our designer to help add those finishing touches.

To successfully stretch and prolong your startup runway the lesson we have learnt is to compromise, dont be so cheap that you try to do everything yourself, half ass it all and in the end have it all being useless (such as trying to put together a legal document without review from a lawyer)  Instead learn enough so that you can articulate what you want by either being able to do the work yourself or doing as much of the work as you can before sending it to the third party. In the true sense of startup tradition this means wearing many hats, hats that you thought that you would never wear.

In our case here are some of the things we did to save

• Learn exactly how campaigns work with the varying advertising platforms/networks and as a result design the appropriate kinds of campaigns to the correct target market and prevent your advertising investments from disappearing without achieving a favourable outcome. You should have an idea of your target market anyway so the key is to understand how to target them with your campaigns. This could mean some research in phycology to understand what triggers users to take notice within your target market. This could include certain words, color’s pictures or a combination of all.

• Read through some sample vesting, deed of assignment and work contract documents or better still download them from places like startmate (thanks guys) and use the open source documents to create the required startup material. You might not be 100% correct in what you write or the way the wording is but its going to be a lot easier for the lawyer to understand what you need once you do the pre-work. This means when you site down with them your not starting from scratch, they understand your context to a fairly deep degree.

• Wireframe, draw or create mockup screens and logos so that the designers have a direction and clear set of parameters to progress on, dont let them pull stuff out of a hat unless you already know what they are capable of.

• Build monitoring tools and scripts, along with optimising the load on your servers to ensure you don’t need to spend heavy on getting the most largest servers on offer. By building the monitoring tools it allows you to use cheaper equipment but know when things need to be upgraded instantly so you dont spend heavy on resources when they are not required. Only spend on resources only at the time you actually need them.

• Cook all the food yourself, if you cant cook LEARN ! work out how to cook various different dishes so that you can buy bulk, eat healthy and still spend almost nothing. What we have noticed  very clearly is that, cost of food usually adds up to be the biggest cost in the short term, specially if you eat out to often.

The lesson here is to COMPROMISE ! Not on quality but on time, allocate some of your own time to save money so this money can be allocated to other tasks that you definitely can not do yourself, like buying food (unless you grow your own food) or paying for fuel and things of the like.

This is the way we have found to save money and if anything you end up learning a hell of a lot of skills saving money by trying to understand how many other aspects within a company work, you learn more than just production design or technology related things which is always good !

In the spirit of this post i thought id show you what we did to save costs on dinner a few nights ago via a compromise. We were going to get chicken fillets which is easy to cook, quick and health, oh and the main the big thing is the chicken doesn’t have a used by date of tomorrow. After walking around for a bit however, we saw a nice MASSIVE leg of lamb for $13.82 down from $40.66 !

As you can see its a big discount of 66%. The only catch was the used by date was the following day. We thought why not, we are going to eat it tonight anyway so we went with the leg of lamb for 13.82, some veges and I made some fried mushrooms in batter and spent some time preparing the food. It fed the 3 of us for the whole weekend and it cost us a grand total of $23.00. So in this instance, spending some time cooking and getting meat that was…. granted, not the freshest (but still very tasty) ended up saving us time in the long run and money and given that its two days since we ate it and we didn’t end up in hospital makes it seem our compromise was worth it

Now thats saving money on food …