Why to Start a Startup in a Bad Economy

nice artcile that gives inspiration to people like us to venture into startups at these difficult times! really an insightful one!

The poverty part about a startup is true. To save money I bought a mountain bike and soon afterwards sprained my ankle so I couldn't ride my bike (to save on gas money) and then I caught the flu and I've been down for the count for 2 weeks recovering and didn't have the strength to pedal. Little things like comcast bills and tmobile bills add up. Starbucks adds up but that's the only place next to Cafe Borrone that I brainstorm and relax enough to write code and design web pages and mess around with ColdFusion8. None of my great ideas came to me in my apartment. They all happened while sitting in a cafe relaxing. My neighbors at my apartment complex are not american and not programmers but they do seem to have a keen interest in bad loud music and burning out with their cars in the parking lot. Founders At Work is a good book and a good read but another book I'd like Livingston to write is about failed startups. Also, a lot of the stories in the book are software projects and not true startups. In a startup you have to embrace failure and change and headaches and it's a demon of a roller coaster. So though it's a startup I still have costs like car insurance, gasoline, food costs, 1,100 a month rent, utilities for electricity. I have a programmer executive chair, a desk from Scandinavian designs and a camping air mattress from REI and a sleeping bag and blankets and great pillow from Bed Bath & Beyond. Shopping at Costco is recommended rather than Safeway or Longs Drugs to save money. So starting a startup doesn't take into account the 3,500 I shelled out for a Macbook Pro (which I bought thinking I was going to become a teacher) and I do use a wind up flashlight from REI for light but I'll switch over to candles soon. Cutting costs is the name of the game. But finding dedicated programmers is the key to victory. I don't recommend anyone start a startup by themselves because there is so much you have to think about and get feedback from friends. I changed the entire design of my site just a week ago and writing requirements is a pain but a necessary pain. Also, milestones work. It's easier to tackle one pebble at a time rather then a whole boulder which is just too overwhelming. Daily progress and weekly progress is the only way it will work. Also, I have recruited many of my friends to help out when the site launches in terms of testing, and accounting, and customer service and they're all going to work for free but none of my friends are coders. Everyone I used to know that wrote code doesn't write code anymore. They either got carpal tunnel or just cut coding cold turkey.

Having money is key. I'm funding this startup with my inheritance but if I don't get funding or the site isn't making enough dough by Valentines day the site will crash and burn and then I'll have to sell my car and I don't want to do that. I sold my car for my first startup and that was the biggest mistake I made in my entire life. Life is much more difficult without a car.

How could I forget. Setting up serve space and a database takes time and money too. And then there is setting up a credit card account so people can pay more easily on your site if you are taking money. Then there's the setting up of the business account at the bank and waiting for eons to get a Federal Tax ID number. I switched over my previous FTID to my new site from my old site because my old site never launched (thank God) but banks do drag their feet in opening up a business credit card account which is needed to set up a merchant account with Amazon Simple Pay since I won't be allowing PayPal since eBay owns them and I'm competing with eBay. The biggest drawback of a startup is the lack of sleep but the biggest benefit is no commute time so you save a fortune in not driving much. So it's a lot more then merely writing code. You need shelter (a place to live) and money for food and rent and utilites and gasoline for the car. Then unexpected bills like speeding tickets, car registration, smog check, and car insurance it all adds up fast and at a frightening pace. So I don't go insane I visit one of my brothers who's studying for his PhD in CS at UC Santa Cruz and I've promised him a job when he graduates. He thinks in C and Lisp and can write bug free code. He's not human. So I spend money keeping him well fed. So sacrifices need to be made. And if your site grows you're going to need more servers and more databases and they run on electricity not oxygen and that costs money. I would think it would be educational and a good thing for all universities to house startups on campus to study them and learn from them but I agree with PG that it's the founders, dedication, determination and not stubbornness. There is a lot of uncertainty too. I just visualize the site working and it keeps me going. I watch videos of soldiers in Iraq fighting on YouTube and then I don't mind so much writing code. At least nobody is shooting at me when I'm writing code. And it's good to take breaks and relax sometimes because you need to unplug from the matrix so that you have a life outside of your code.

One things that helps too is that in recession time large companies have no available resource to stomp you out of existence. They're fighting to survive, cutting jobs and getting completely disorganized, and no one realizes there's a little guy out there who's stealing markets and clients.

Paul, a timely and encouraging article, thanks.

- Varun www.homecamera.com