Tag Archive for 'Bootstrapping'

Bootstrapping your IT

Published
by
Michael McKay
on 23 September 2008
in Information Technology and Virtual Corporate Desktops
. 0 Comments

If you are a new startup that requires several people to work together, just how cheaply can you set up your IT network? Very cheaply it turns out.

You will need computers - but just about any old computer will do. You can use the cast offs from other companies that are upgrading - they often pay to have them removed. The software on the machines is not important as long as they have a browser and a functioning Internet connection. Don’t go buy the latest machines loaded with expensive software. If you have to purchase computers, try to purchase used ones. If you really want a new one, get the cheapest model with the least software. Don`t get a laptop until you really need it.

Next you will need Internet access. Start-out with a dial-up connection - it may work with the other suggestions I’ll make below and it is cheaper than highspeed DSL. If you have wifi, find a free drop and work from there. (Note that two café lattés from Starbucks cost as much as a month of cut-rate DSL.)

If the other employees are also working at the same location, you will need a router to share the internet and some cables.

Don`t buy a server! You won`t need it.

For the software, use the web. There are fantastic services out there that can support a new company with collaborative tools and software that is free to use or extremely cheap. They are either web based (web2.0) or hosted desktops. Here is my short list of hosted desktops:

  • Ghost (G.ho.st)- provides a web desktop via a browser with 5 gb storage and 3 gb of mail. It is a fully hosted solution aimed at personal users. It just released a version accessible from mobile devices. It includes a full suite of applications as well as Zoho and Google apps (see below). Very cool stuff and probably good enough for starting up.
  • Ulteo- a open-source free personal desktop that can be shared with others. It is Linux based and comes pre-loaded with applications such as the Open Office suite. Desktop sharing is useful for collaboration and as a web conferencing application. The number of invites is limited and fees apply as more are added. There is no corporate shared storage. The desktop is hosted by Ulteo or can be downloaded and run locally. File synchronization is supported between local and server storage.
  • (TBD) - there are other services coming. Stay tuned for more.

For web 2.0 solutions, check out the following list:

  • Central Desktop- a web2.0 collection of team collaboration tools. While there is a free version, the memory available is limited to 25 MB - not alot. Fees increase with the number of users, projects and storage.
  • Google- Google provides Google Docs and the more complete Google Apps which provides business e-mail, collaboration tools and on-line storage. Very popular. Has a 30 day free trial and then its $50 per user per year. If you can put up with advertisements, there is a free standard edition that is supported by ads.
  • Jooce- an online system for nomadic computer users. Limited in scope and aimed at social networking from any Internet terminal. However, it is free and there are (currently) no storage limits.
  • QTask - an web based project coordination tool. First 5 users are free for the first year, then it is $50/user/month.
  • ThinkFree - a Korean company that provides on-line office software. There is a free office suite and a workspace edition (in beta) for corporate use. The applications are high quality and look very similar to Microsoft Office. Mobile devices are supported. While they support on-line access, their main target is self-hosted solutions.
  • Zoho- a suite of web2.0 applications that provide most of what a small business needs. There are a wide number of generic applications that can support small businesses. Zoho is very similar to Google Apps but has a broader selection of applications. Collaborative document editing is possible making it an excellent choice for a micro business.
  • Zooos - A web 2.0 office application suite. Looks to be still in development but the blog and other parts of the site appear inactive.

Other interesting solutions that require a server:

  • EyeOS - EyeOS provides an open-source server solution that allows your company data to be accessible from everywhere. However, they do not host the server - you have to do that.

If these solutions don’t solve your problems then you may have to purchase a server and set up a LAN. Just beware of the costs and complexity involved. The above solutions can be up and running in minutes. A LAN will take days and cost you many hundreds if not thousands of dollars. Then add the software. By the time you get file servers, security and enterprise e-mail with MS Exchange Server installed, you can easily spend $30,000.

If you know of other web 2.0 or hosted business solutions out there, I’d like to hear from you.

Bootstrapping

Published
by
Michael McKay
on 2 July 2008
in Financing and Management
. 0 Comments

The reduction in venture funds has not dampened the entrepreneurial spirit in Ontario. I’ve been very impressed by the number of companies that are managing to develop despite the lack of 3rd party financing. Most are finding ways to get by and are probably stronger for the effort.

Referred to as “bootstrapping”, companies are finding ways of generating enough cash to get by without (or with limited) external investments or debt. A quick Internet search for the term shows lots of resources for companies that are trying to follow this model. The key element is cash management. More than profits, quality or anything else, getting more cash than you spend is key and that makes “cash now” the main tactic.

To generate “cash now” you want to make as many sales as possible as quickly as you can while getting paid in advance if possible. Any agreements you make to pay for services should be made to pay as late as possible. The company’s survival depends on the slight difference between the time the money comes in and the time it is used. A few days can make the difference.

It is possible to turn just about any future cash payment into cash now if you talk to the right people. (See Acorn Partners.) Investors are out there who will buy your future SR&ED tax credits on your R&D efforts, your future credit card receipts, your future invoices, or your existing accounts receivable. Its expensive - often 75 cents on the dollar - but comparable to offering a 25% discount to customers if they pay immediately rather than on net 30 terms. If you have accounts receivable, you may be able to get a bank to provide a credit line based on the amount of AR you have. It is a good idea to get these accounts insured up-front by EDC.

The opposite applies to costs. Don’t buy anything unless you will absolutely fail without it. Beg borrow and scrounge as much as possible. If you do buy, barter first and then buy on credit with the longest possible terms and the lowest monthly payments. Avoid paying cash up front for anything.

Be smart about it though. Bootstrapping involves all kinds risks inherent in the decisions made as you try to make quick sales. It takes good judgement to get the right balance between fast and good and to avoid desperation. You can’t sell at a loss just to get cash and expect to be in business for long. You must also honour your commitments. Successful businesses are built on trust and cooperation. Recognize that you are building your reputation along with your business and act accordingly.

Above all, have fun!