Getting a startup off the ground
Following the yellow brick road ¶
Photo by Chris Devers
Recently at pebble we’ve had a lot of discussion about the best way to get a startup off the ground. We have the ideas and the skills but need a coherent way to make it happen. We’ve got a mixed team of designers, developers and business level people all of whom have different skills and different ideas on the right way forward.
Here are the options as we see it and the relative pros and cons.
Use client work to fund the startup ¶
This model works where the team works on client projects in order to fund the time to work on the startup. The profit from the client work pays salaries and any fat is pooled into a fund to support working on the startup project.
Pros
- No external or personal investment is required
Cons
- Lead time before the fund is big enough and the project can start.
- Will end up working on the project in fits and starts.
- Client work never ends!
Hack days ¶
Come into the office at weekends to work on the startup. Given the short amount of time available it is felt more work will get done and the project will progress further.
Pros
- Everyone is available at the same time
Cons
- This isn’t great for life outside of work and needs an understanding family/partner
- Very short amount of time to work on the project
Spare time ¶
This essentially asks members of the team to work on the project for free in their spare time. Particularly for designers and developers this can be a significant amount of time.
Pros
- If you can find a willing developer this is a great option as it doesn’t affect cashflow or client business.
Cons
- Pressure on personal life.
- No guarantee that you’ll actually see a return on the investment of your time.
- Risk of developer burn out.
- Working in fits and starts.
Venture Capital Investment ¶
Go into the market and see if an idea can get investment.
Pros
- The project will be funded properly so a team can be resourced properly.
- Dedicated time to the project
- Bad ideas will quickly be shown to be bad ideas
- No need to continue client work
Cons
- Need to give a significant part of the business away
- Very competitive
Personal Investment ¶
Members of the project team put up their own cash in order to fund a project.
Pros
- Able to resource a project properly
- Full ownership of the business
Cons
- Personal money at stake
- Further rounds of investment likely to be required
Develop something for a client then spin it off ¶
This model means developing a product for a client and then extracting it into a web application. There are issues over intellectual property here but if these can be resolved this is a great option.
Pros
- You have an active client to help scope the product
- You get paid for it
- The development costs are largely covered by the client
Cons
- The product may end up being too specific to the client
- Intellectual property issues
Conclusion ¶
The biggest issue in all of this is funding. We have the skills and the ideas but we also have mortgages and families. None of the options are 100% perfect and the one we’ll choose won’t necessarily be the right one for all situations.
Ultimately this situation is no different from normal business rules and getting a business off the ground. It is about risk and return. Some options are safer and take longer to achieve, whilst others are more risky but resolve the situation more quickly.
So take your pick Dorothy.
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See Also
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Building a Rails development server
An server stack to facilitate development against almost any Rails environment. -
Creating a basic site with Node.js and Express
A walkthrough on how to create and deploy a basic site with Node.js and the Express framework. Examples of generating an express site, how to use templating and styles, creating basic routes and deploying the app to the Internet.