

How to bootstrap your company to profitability - spencerfry
http://spencerfry.com/how-to-bootstrap

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tptacek
Love this article. If you're going to start a company because you're confident
in your technical ability, you can start a consultancy easily; tens of
thousands of devs freelance, running single-person consultancies instead of
taking W2 from a single company. A small consulting company is a better
starting point for a new business than a full-time job.

~~~
mark_l_watson
I totally agree with you. I originally started (a little reluctantly)
consulting 12 years ago because we moved from a large city to the mountains so
telecommuting-based consulting was a necessity, but now, I would not want to
give up my independence. Also, as a consultant you can never lose your job if
the economy gets a lot worse (although business can be lean). I have two
business ideas I want to pursue, one at a time (one dealing with statistical
NLP, and the other taking my old cookingspace app and revamping it more for
mobile use for shopping and use in the kitchen).

I think that consulting is a great way to get varied experience, enjoy working
with lots of different people, and have flexibility for working on side
projects.

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gizmo
The author mentions 10+ years experience at running startups but according to
the blurb he's 26.

It also looks like he was doing consulting work to pay the bills between his
3rd startup and Carbonmade... for a full 18 months. That doesn't make much
sense to me. How can you first sell 3 profitable companies and then go back to
consulting for 18 months while trying to bootstrap a new company?

I can only guess to the explanation...

I also question some of his advice. "Your first dollar validates your product,
your business model, and everything else" contradicts my experience. So I'm a
little skeptical.

~~~
spencerfry
I've actually been doing Internet businesses starting at age 11. But my first
real business was at age 16 when I started an ISP, web hosting, and shell
service company over the summer. We did very well and made a nice tidy profit
on that. But I began by starting and selling small websites (forums, game
review sites, etc.).

I then started my second real business at 18 where we sold game server
hosting, web hosting, and ventrilo services. This company lasted about a year
until I took the web hosting clients, built the web hosting services up, and
then sold that to a much larger NYC based web hosting company to pursue what
would be lead to my third business. Note the progression in size.

My third business was a voice over IP company for computer game players called
TypeFrag. I started that in 2002 during my sophomore year of college, and ran
it for five years and five full-time employees all while in college until
getting a buyout offer of my 50% share that I couldn't refuse during 2007 when
I was 22 years old. During that time, I also launched a software company
called GameComm under the TypeFrag brand. That company won first place and
$75k during a business plan competition and we hired two full-time guys to
build out the software for us. That's company number four.

After selling TypeFrag and GameComm, I started in on Carbonmade when I was 22
and have been working on that since. Carbonmade is company number five -- I
say company when it's a registered LLC and cash positive and profitable -- and
continue to work on that to this day.

So, technically, I actually have 15 years experience working on the Web, but
tend to shorten that to 10, because my first "real" company (not just a small
money making forum/review site, etc.) came when I was 16... 10 years ago.

You can see my bio here: <http://www.crunchbase.com/person/spencer-fry>

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outotrai
How did you and do you decide which services to provide? How do you gauge
demand as you're thinking of possible products?

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eande
looks to me that Spencer Fry would be a good candidate for Mixergy

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AndrewWarner
I'll email him now.

~~~
spencerfry
...and replied. I love the Internet. ;)

~~~
dmix
Just checked out Carbonmade, the designer in me is in awe.

Excellent presentation of some beautiful content.

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mkramlich
well written with good tips, and inspiring

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ahoyhere
Great article.

To which I'd add:

The only real downside of bootstrapping while consulting is that consulting is
a soulsuck, and it's so much more fun to work on your own thing. Or,
consulting is so much of a soulsuck, that it depletes your energy to even work
on your own thing.

You just have to monitor your energy & passion levels carefully to ensure you
make choices that help you keep both balls rolling.

We're doing the same - and I just quit consulting a couple mos ago. It's
fabulous to look at my fledgling product, designed just how I wanted to, and
know it will start grossing $10,000/mo in just a few more short weeks.

~~~
tptacek
If you're only good when the work isn't a "soul suck", your odds on getting a
company going aren't great. The fun stuff is a small fraction of the job. Even
when you optimize for "fun stuff". This may be part of the reason Graham keeps
saying that the determinant for successful startup people is "tenacity".

~~~
lsc
tenacity is key, but personally, I don't think 'soul suck' relates at all to
'hard work' except in the sense that soul sucking work is hard. 'Soul suck' is
almost always a sign that work is being done that doesn't need to be done, or
that work is being done in an inefficient manner.

In my space, the major 'soul suck' for most people is phone support and sales.
I simply don't provide those services (and I've lowered my prices to
compensate)

The thing is, when it's your company, you never have to do something you think
is stupid. (yeah, you still do some stupid things, or, at least, I do, but
when I notice it's stupid, I stop.) It's completely different from working for
some PHB because when a customer gets unreasonable, it's simple enough to
simply refer him or her to your nearest competitor.

Sure, you still have to do things that are /hard/ but there is always a clear
reason why you are doing the thing, and if you don't think that reason is good
enough? you don't have to do the work.

~~~
stcredzero
_In my space, the major 'soul suck' for most people is phone support and
sales._

I've often wondered if it would be possible to offer people a chance to
outsource phone support in the small business or startup space?

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lsc
It would certainly be possible; people do it even. (I don't know of anyone
targeting small companies specifically, but there's no reason why it would
need to be difficult to setup.) But, it's something that is so difficult to do
right that I personally am probably better off not doing it at all. /bad/
phone support, at least for my target market, is worse than none at all. (this
is quite different if you target more business oriented and/or less
technically oriented people.)

That's the thing about phone tech support; it's cheap and easy to do badly,
and really difficult and expensive to do well. You need to look at who your
customers are and decide if bad phone support is better than no phone support
at all, unless you have more volume than I have and a higher margin than I
have.

~~~
stcredzero
Just a first-order filter to answer FAQ items might be worthwhile, with
messages taken for callback.

~~~
lsc
a phone faq? Really? when I hit those as a customer I assume that the company
in question thinks that 1. I am illiterate and 2. my time has no value.

I mean, sure, I'm a nerd and hate talking to people over the phone. But
talking to a machine over the phone is even worse.

The advantage of phone support is it's immediacy. if you get rid of that, you
might as well eliminate the phone altogether.

