How Open Source Drives Down Startup Costs

prostoalex writes "Reuters Plugged In article (usually syndicated to your local paper's Technology section) talks about the real impact of open source in the technology world -- cutting down startup costs for other developers. New ventures are coming out, where the startup costs range in five-digit numbers, not seven-digit figures, where venture capital financing would be required. The article talks about Project for Open Source Media, Blogger.com, Odeo and Asterisk telephone system."

Comments

Re:5 figures?

[mcrbids]

If you can get a company going for five figures, you have my respect. I am trying to get a startup going and after doing alot of analysis, the cheapest I think I can do it is for just over 7.

Then maybe:

1) You have a sucky idea. The best ideas are actually little more than a logical culmination of pre-existing forces, and really don't require the loss of a kidney to bring to fruition.

2) You have lousy marketing. You should be able to cover much of your initial cost in the first sale or two. If you can't, you might see #1 above, or maybe #5 below.

3) You lost the idea of a "partnership". Typically, you have at least two guys: a guy with the marketing skills, and a guy with the tech delivery skills. There may be a third/fourth partner depending on the situation. These people get together and get paid with a percentage of the company. It's typical to moonlight to provide food money during the startup phase. If you're lucky, your "day job" complements your new business.

4) You are fatally unrealistic in your cost analysis, see my earlier post about card tables. I just commented on managing costs a few minutes ago...

5) Lastly, maybe your idea is too big in scope. Start with something a bit smaller, or maybe just part of your idea, and get it working and profitable before biting the whole banana.

I've started a number of businesses - some I've run quite well, some have run straight into the ground. Be cheap, work hard, and focus on turning a profit ASAP. If it takes very long to get to profitability, from where I stand, you're walking the wrong road.