When I co-founded my first startup, Blanketware, in 2000 (just before the dot-com boom went bust), I talked to a company about building an online application.
Before the meeting started, I joked about how it would be great to have one of its $1,000 Herman Miller Aeron chairs, which seemed decadent compared with the $35 assemble-it-yourself chairs that Blanketware had purchased from Staples. The salesman said he could get us a deal because they had recently bought 300 chairs. But even if our firm had been given a 50-per-cent discount, there was no way it could justify spending hundreds of dollars on a chair.
These days, being frugal is alive and well, and should be part of any new-business operating philosophy.
When Lauren Friese started TalentEgg.ca, a career site for students and new graduates, she embraced the idea of spending where it was needed and then getting everything else for nothing or at little cost. It has provided her with a lean operating structure to bootstrap the business.
While TalentEgg is a Web site, Ms. Friese says she quickly realized it was not a technology company but one that leverages technology to get things done. For example, TalentEgg outsources all of its technology development work through a service called Odesk.com. It also takes advantage of low-cost or free online tools such as Google Apps for business, Pipelinedeals (tracking sales) and Dropbox (online storage and file sharing).
Ms. Friese is also a huge fan of Skype, which offers a variety of free or low-cost online telephony services. Rather than using a traditional and expensive telephone service, Ms. Friese says TalentEgg bought $30 headsets for all employees, and then gave everyone an unlimited North American Skype plan that costs $3 a month. The plan also includes chat, video and conference calling.
While being careful about how and where to spend money is important to Ms. Friese, she also recognizes there are trade-offs, and sometimes it makes sense to spend more rather than less.
"In deciding to save money on certain services, you are sometimes substituting an investment in time for an investment in cash," she explains. "As we've grown, there have been times when I've decided to spend because the value of our time was greater than the extra cash value of whatever we were buying."
Special to the Globe and Mail
Mark Evans is a principal with ME Consulting, which offers strategic and tactical marketing, communications and social media services to start-ups, as well as larger companies. Mark has worked with three start-ups - Blanketware , b5Media and PlanetEye - so he understand how they operate and what they need to do to be successful. He was a tech reporter for more than a decade with The Globe & Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshUniversity and meshmarketing conferences.