
Ultralight startups: little capital, just computer - pietrofmaggi
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/09/06/BUKQ1F7CM4.DTL
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il
These types of e-commerce businesses are not something you hear

I'm trying to do something similar right now as a side project. I'm not
selling t-shirts, but the economics are similar. If you actually research it,
it takes very little startup capital(several thousand dollars) to go to a
manufacturer and create your own product, even professional-looking consumer
packaged goods.

These types of business may not attract investors or get acquired, but it's a
great way to generate easy, automatic income streams while you work on
something bigger.

~~~
secret
I've been wanting to hear more about this type of business, but don't really
know a good source that covers it. For example, the other day there was a
story on here about a site that had just reached 200 subscribers paying
$10/month after I believe 2 years. It was a lot of work and more successful
than most apps will ever be. It was a really interesting read, but got me
thinking: wouldn't it have been easier/more profitable to get into e-commerce?

~~~
migpwr
It's difficult and usually becomes more about managing business finance than
the products in my opinion. It seems like this type of business is mostly
covered in Entrepreneur magazine, or Inc, but they're always feel good success
stories.

I helped build a fairly successful online business that sold a single laptop
accessory which we had produced, packaged by hand, and sold directly to
consumers. The site generated 60k in yearly revenue on somewhere between 5-10k
(Christmas peaked at 20k+) unique visitors per month. The margins were really
good since we had it produced ourselves and priced high. It was great business
while it lasted but I ended up walking away from it because of partner issues.

My old partner still operates it today and it's nearly 4 years later! She
tells me that it still generates about half of what it did at peak, but it's
slowly fading away because of bigger companies that deliver a better, and
cheaper product.

It's great experience and takes time but isn't hard to do.

~~~
secret
I've read both magazines and agree that there is not much depth to their
coverage (or most business magazines for that matter). My background is in
math/business, so I do enjoy the logistics and finance aspects. The
interesting challenge seems to be the initial market research/product
development. Finding the right thing to sell and then putting together that
thing seems to be the toughest part (someone correct me if I'm wrong because I
have no experience in this).

The web in general is flooded with stores selling the same dropshipped
products, so to stand out I believe someone has to take the path you did and
have something unique produced, otherwise you're just competing with Amazon
and the like.

I remember reading an article in Business 2.0 about "micro-multinationals" [1]
and the thought has always been in the back of my mind to try creating a
completely distributed company, with ecommerce being the initial distribution
channel. Work and grad school kept me too occupied to give it much thought,
but reading about things like this always reminds of the article.

[1]
[http://money.cnn.com/magazines/business2/business2_archive/2...](http://money.cnn.com/magazines/business2/business2_archive/2006/07/01/8380230/index.htm)

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dstein
I think this is the sad reality of the world we live in today. The job market
sucks. Salaries are consistently dropping. People are being squeezed from
every direction. And there's no such thing as a long term job anymore. The
market is basically telling every highly skilled worker to start their own
business or get in line at the welfare office.

~~~
muhfuhkuh
"Sad reality"? I see the biggest opportunity for US growth since the Great
Depression. When that struck, people became reflexively wary of investing in
markets, blaming Wall St. and scorning robber barons. So, they sold apples on
the street, or built scrap metal businesses, or little collective cottage
industries, or invented the better mousetrap or dish detergent or soda or milk
delivery service.

The Obama administration has the chance to change the narrative away from the
WPA-type government works, consumer stimulus and all these other FDR/Keynesian
tricks that tea partiers liken to Soviet Russia and instead focus on the
biggest driver of employment and b2b consumption: Small business.

I think it's well passed time for us to really soak corporations who in the
early 2000s took every tax break and still continued outsourcing, offshoring,
right-sizing, and "pivoting toward core competencies" or whatever that hell
the new PHB term is today. Tax the s--t out of them. What are they doing with
that cash, anyway? They're definitely not hiring here and they're not
reinvesting except outside of the US, where the growth is larger and the
market less stagnant. Tax them until they hurt or move to Dubai or wherever
the hell they go nowadays. Don't believe their narrative in the press that
they're the biggest driver of employment. SMBs have _always_ been the big
hirer; larger than the Fed, larger than the megacorps.

Obama's administrative focus should be almost laser-like on small business and
entrepreneurship, and not just Green ones. ALL of small business should get
every damn tax break his administration can give. That, added with tax
incentives for SMB purchase of health care, can make working for an SMB even
more attractive to potential hires.

This is the moment for the SBA to become one of the most important departments
in the Government during this recession. They should be flush with cash,
doling out loans at-cost or at lower rates than the stingy big banks that
won't lend to Main St. anymore. Let them sit on the sidelines while the
government guarantees the survival of the US economy. They'll come around
eventually and drop their CDO and leveraged funny money games and start
focussing on lending money to fuel growth industries again.

Hey, one can dream.

~~~
kiba
I prefer that David fell the Goliath, with no help from the government or
anybody else.

If small business have merits, than they should be able to thrive on the free
market.

~~~
muhfuhkuh
Me too, but the problem is starting up. There is no cash to start. If you've
got an idea and it takes some capital to bring it from PoC to finished
product, you're stuck because banks _are not_ lending to small business, full
stop.

That's why I see the SBA coming to the forefront with direct microlending and
guaranteed super-low interest rates for mom and pop loans.

Not everyone has a business idea that can get the attention of YC or
TechStars. It sometimes takes a nudge to get things going. It's a big country,
with people that have varied skillsets, education levels, and means of
opportunity. If we want to encourage entrepreneurship, we need to either
empower them directly with tax dollars, or we give those dollars to banks who
may or may not do it for us.

What we obviously can't do is cut taxes for the rich and corporations and hope
they hire the unemployed, because I'm sure you'll agree that it obviously
hasn't happened.

~~~
kiba
I am not sure if I want to use coercion to achieve said goal of encouraging
small business and entrepreneurship.

I prefer the method of cutting down regulations and coercions put out by
government then see if it help small business stack their advantages against
big business' disadvantages.

I also dislike favoring anybody, even the little guys.

~~~
muhfuhkuh
Well, in a fair world, we'd have zero regulations or need for taxes or
government at all (except for enforcement against personal abuse like murder,
rape, theft and invasion), and as an example, oil companies wouldn't ever have
spills because of the extremely high potential to be sued by the people living
in the regions where spills occur and actually _lose_ these lawsuits, which
effectively means going bankrupt and forced out of business paying back all
the damage awards. That's the ideal Libertarian solution to the outsized hand
of big business on both market and customer. It's similar to the Xeer
stateless government, as adopted in Somalia. Maybe it can scale to a country
of 305 Million, but that truly is a "grand experiment" likely left as a
thought exercise for now.

In reality , though, the solution is a simple matter of tax revenue arbitrage.
Instead of providing tax breaks to the lethargic corporations that will take
those tax breaks but won't hire anybody anyway, give it as a guaranteed loan
to a small business who will use it to directly hire workers and consume
products and services expressly for business continuity and growth. Spread
thinly enough, while the failure rate outpaces the successes, the succeeding
companies have the potential to hit it _really_ big, spurring ancillary and
supporting feeder companies sprouting around it and possibly creating a new
industry.

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tmcw
Ultralight startups: there's one of them mentioned and it survives by SEO and
reselling.

Is this much different than opening up a local McDonalds and advertising? Is
this really relevant to HN?

~~~
il
I can't tell which you loathe more- SEO or a real business model reselling
actual products.

This is an article someone who created a very successful startup at a young
age by "hacking" the traditional clothing value chain and business model.

This is exactly hacker news. If it doesn't strike your fancy, there's an
article about pants that I'm sure you would enjoy more right over there <\--.

~~~
tmcw
It's hard to say which I loathe more. Perhaps what I loathe the most is that
the startup atmosphere and the skills that one acquires in tech allow you to
do incredible things and make the world better (or at least cooler), but
here's something that adds friction to the world economy.

------
jessor
The next two weeks will tell if it's real, but this article might have kicked
me into doing a nice little niche webapp :)

------
seanstickle
ooShirts appears to be a fairly direct rip-off of a company I used to work
for, CustomInk.com.

Compare: <http://www.ooshirts.com/> vs <http://www.customink.com/>.

Maybe it doesn't take too much money to start up a company that is more or
less ripping off another company.

This isn't to say that competition in providing tshirts is a bad thing. But a
profile of a company that lavishes praise on the cleverness of starting up an
ultralight, while discreetly ignoring that his web application is a page-for-
page knockoff of a larger company is fairly disingenuous.

It's possible that the reporter didn't know about CustomInk. But that doesn't
excuse Raymond Lei's profiting by stealing the inventiveness of another
company.

~~~
muhfuhkuh
So, how is customink.com different from, say, cafepress.com, which launched
before? Or spreadshirt for that matter. Making your own custom t-shirts is not
really a novel idea.

And, it's not the idea that the story is focussing on anyway, it's the fact
that it's basically a two-man shop with a 19 year old founder completely
bootstrapping it while waiting to declare a major in college, and the grim
economic realities nurturing these "ultralight" businesses.

~~~
seanstickle
As a business, making and selling tshirts is no great innovation, I agree.

But when the web application is a painstakingly detailed clone of another
company's, I think that the virtue of "completely bootstrapping it" to be
undermined, and reduced to little more than a "me too" business.

I think that if someone started up a company called MacRonald's, specialized
in selling cheap hamburgers, and had a clown mascot who wore a funny tophat,
it wouldn't be praised much. Even if the founder was a 19-year-old.

~~~
c1sc0
What is the difference between me-too and competition? Or is competition
suddenly unhealthy. If the original company is so much better than the
upstart, they don't have anything to worry about.

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aaroneous
I like the concept of "ultralight startups" but there have to be better
examples out there that are, yanno ... actually startups.

This is just someone middlemaning an affiliate program - something that's
really old hat in the ecommerce world.

~~~
_corbett
I think he qualifies as a startup more than many "startups" taking rounds of
funding never achieving revenue

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_corbett
nice work! I love seeing businesses which don't rely on big capital.

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zackattack
I have _no idea_ what's up with all the hate in this thread. Code is both a
means to and end and an end in itself. Hacker News attracts people of each
perspectives, and also some people like me who share both perspectives. Can't
we all just get along AND give this guy some credit for a massively
resourceful accomplishment, and a nice contribution to the global economy?

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cantbecool
He hired programmers in India to code for him. Albeit, there is nothing wrong
with that, but if he ever tries to update the code himself, he is going to be
in for a rude awakening.

I too think this article isn't HN type material.

~~~
atomical
So no Indians can produce quality code? I find my experiences suggest the
opposite.

~~~
cantbecool
I just don't think he's such a 'big' entrepreneur relying on other peoples
code/work. I have nothing against any programmers nationality. Sorry if I
offended you.

~~~
mbateman
"Programmer" and "entrepreneur" aren't remotely coextensive. And hiring
someone to code something for you is a very particular, entrepreneurial
species of "relying" on someone.

