Creating an online startup for under $300.
So you want to try your luck at a startup?
My first piece of advice… if you have a job, don’t quit it.
Startups are 5% idea and 95% execution. Understanding and planning how you are going to execute can be done while you have a day job.
Hopefully the wealth of information below can make it easier to plan. Worst case, there are pretty pictures.
What is first? Where do I start?
This question is something I struggled with my first time. I was sitting with my friends and thought “hey we have a cool idea, let’s do it”… Then a mix of blank stares happened combined with “let’s just code it all right now”. I had to fight the urge of just coding something to solve all our problems like we were in college. So we did some research and found some tips to get up and running.
- FREE: Think of a customer problem that you are passionate about. Maybe you are your customer, maybe it is something you see happen in society or in your family. Don’t lose sight of this as it will be your driving force.
- FREE: If you are going solo, great! If not, find a team that shares the same passion as you. Investing in people that share the same value and vision as you is critical. People that challenge and push you to be the best you can be will be more important than anything you build.
- FREE: Define a vision (future you want to become) and a mission (what are you going to accomplish now). You can pull this from your customer problem.
- FREE: Pick a business name. Make it memorable and have a few different layers of meaning (either to you or to the public). You get bonus points if it looks good in a logo. Once you have a name, search to make sure there are no trademarks issues, social media accounts with it,or business domains already registered.
The first 30 days — Business
We had the least amount of experience in this section.
None of us were business majors or had business experience. We worked at big companies before, so we never saw how the “sausage was made”. Fortunately, we had smart people around us and we are pretty good at avoiding fake news.
5. FREE: Read the Lean Startup (or watch the youtube videos). It has a ton of great advice and techniques that will get put you in the right direction.
6. FREE: Build a business plan. I avoid traditional ones because they are long and tedious. I recommend creating a Lean Canvas and/or Business Model Canvas. You should have enough information by this point in order to fill out most of it. Don’t worry if it isn’t perfect or very detailed. The goal is to challenge you to think through those things overtime.
7. $100/$500 Form an entity sooner rather than later. If solo, maybe a sole proprietor. If a team, at least start with a general partnership. Then quickly go into an entity such as California LLC or Delaware Corporation before you take your first customer. Cost: $70–100 in forms to fill out. If you go this route, do this as soon as possible because you will need to file for an EIN (IRS taxes) and a bank account.
Note about lawyers: you can always get a free consultation from a lawyer (if they don’t give you one, walk away).
Online lawyers cost between $150-$250 an hour. Medium sized firms cost around $250 an hour. Big firms can go from $500-$800 an hour. Be careful on how much time you consume from lawyers.
It is also possible to get flat fees for this as well (Stripe offers a $500 flat fee with goodies like AWS credits).
8a. FREE/$10 a month: When forming an entity you will need to put a location down. You can use your house, but you may want to look into zoning requirements. There are virtual solutions such as a “virtual business mailbox” as low as $10 a month. If you choose a virtual solution, it needs to come with a registered agent and P.O. boxes are not allowed. If you want to work in an office you are looking at $75–100 a month.
8b. FREE: Generate a privacy policy and terms of service. You can find free templates online that will cover most use cases. Make sure they cover analytics as well (incl demographic, age, etc).
9. FREE: Define roles and responsibilities. Keep it simple. Who makes decisions. Do you vote on them? Who breaks the stalemate? How many votes do you get per person? Who will be responsible for social media, for website, research, networking, applying for X,Y,Z. Define times on when you guys will focus on work and times you can work solo.
10. FREE Decide on equity (percentage of shares between a team) and vesting schedules (when do they get it). Its also a good idea to reserve some equity for investors, new employees, board of advisers, etc. If people are going to be doing equal work now and in the future, split equally. If not, split based on future based work, as that is what investors look for. Normal vesting is either 3 to 4 years .There is lots of research out there and best practices, here are a few sites.
11. $20 a month: Get accounting software to track your transactions. Make sure it can sync with the bank you plan on using. Doing your taxes will be a million times easier. Things like QuickBooks will do the trick. This will help you monitor cash flow, reconcile your account, income statements, and profits/loss.
The first 30 days — Technology
This was the easiest section for us.
Using awesome technologies was something we were used to. Now tools don’t solve all your problems and some of these are probably overkill if you are just 1 person, but as you grow some of these tools will save you a lot of headaches.
12. FREE: Communication will be critical.
- FREE: Sign up for something like Slack, Telegram, GroupMe, Whatsapp, or Stride to keep in touch.
- FREE / $5 per month per user: Source control to hold all your work. Bitbucket offers free private repositories and Github has them for cheap.
- FREE: A project management tool can also be helpful if you aren’t colocated (if you are, sticky notes will do). If you use Github, you can use Zenhub on top of it to manage issues. Trello is also a great free tool for project management that integrates with Bitbucket.
13. $1 per month: Get a business domain. This is a unique url (think of www.google.com). I’m a fan of Google Domains because I enjoy staying in the ecosystem. Get this as soon as possible. Do this before you incorporate your company.
14. $5 per month per user: Get a business email address and storage. For your storage, organize things in folders and store everything there for collaboration. Google G Suite is one of my favorite all in one for this. There are creative ways to get free trials through Google and 3rd party vendors like Amazon.
15. FREE: Build a website. If you aren’t tech savvy there are free solutions like Wix and Shopify. If you are a coder, I recommend a static website hosted on Firebase or Github Pages. This will probably last you at least a few months before you have to start paying for hosting.
15a. FREE: Sign-up system. If you went with one of the free services above, it comes with sign-up systems for free. This is used for collecting e-mail addresses for interested people. If you are a coder, you will also need a sign up system and database. Firebase does support a database as well. I’d start with that before trying to move to Google Cloud, Azure, or AWS.
16. FREE: Analytics. Before you start going crazy and sharing your website to all your friends, get analytics setup. This is going to be critical to your business in order to measure your performance. Google Analytics and Facebook Pixel are good places to start. Make sure you put analytics on everything (including email campaigns, buttons on your website, forms filled out, etc). We will provide a future post on this.
17. FREE: Setup ads on your site. This will allow you to generate a little bit of money while you are getting started. Most people choose Google AdSense. On free services, they have a section. You will need a decent amount of content before Google AdSense will approve your site for use.
The first 30 days — Social
Digital marketing is a pretty awesome space, but can also be scary. If you think that you are awesome at posting on Facebook or Instagram then you are half way there.
Add a little organization to the mix and a few tips, you can master the startup digital marking space. Social will be the main funnel to your customers. Networking, both in person and on the web, will make or break your business.
If you aren’t willing to go up to a stranger at Starbucks and ask them questions, you will probably end up building the wrong thing.
18. FREE: Register your account on all social media platforms (even if you aren’t going to use it right away). Facebook, Twitter, YouTube, Snapchat, Medium, Google+, LinkedIn, Angellist.co, etc. If you can’t get your name try adding “HQ” or “INC” to the name.
19. FREE: Utilize a social platform that supports posting to multiple networks at once and scheduling posts for the future such as Hootsuite. Hootsuite supports up to 3 for free and becomes an easy hub for you.
20. FREE: Utilize free credits for Ad campaigns. Facebook gives you $30 credits in boost. Bing gives you credits. AdWords gives you credits. Pro tip: if you have a friend at Facebook they have an awesome company perk that gives free credits as well.
21. FREE: Post daily. Generate your brand. It can be about your business, your back story, etc. Don’t forget to link back to your site as well.
22. FREE: Go to local meetups (even if they don’t have anything to do with your industry). Spread the word. Build connections. Network. Network. Network. We rarely do this alone and you would be surprised on how many people there are around you, wanting to help.
What happens after the first 30 days?
If you completed all of the above, then you are blazing fast. I’ll write another post on “What to do in your first 100 days” in a few weeks.
In the meantime, keep working on your business plan. If you plan on collecting money from investors, you will want to apply to incubators, accelerators, etc.
After your business plan is well though out, focus on building a good road map. At some point you will want to turn your road map into small deliverables that your team can deliver on.
Interested in watching us grow? Check us out at Lunafi.com
