Starting a business is now easier and cheaper than ever before. Technology and the Internet’s enablement of the virtual company is a game changer for today’s entrepreneur.
Reflecting back to my first company in ’93, we didn’t have anywhere near the technology leverage available to today’s entrepreneurs. There was a definitive and painfully expensive suite of business startup costs that were hard to work around. Necessities such as phone systems, fax, e-mail server, offices, travel expense, premium legal expenses, local labor and technology infrastructure put a hefty price on most technology startups. Everything we needed was essentially sourced locally, with very modest thought about the impact of globalization.
Enter 2011, starting a business has been changed forever with the constant evolution of technology enabling the virtual company. Here are some quick examples of how globalization, technology, and outsourcing are helping entrepreneurs manage basic business startup costs:
Legal Services*
- Incorporation – legalzoom.com, incorporate.com
- Online contract signing – Rightsignature.com (SAAS)
- eMail – Google’s Gmail, others (SAAS)
- Messaging – Skype, Google Talk, mobile text
- Fax – efax, others
- Phone - Skype (free), Fonality (SAAS), Grasshopper.com
- Identity – 99 Designs (crowdsourcing)
- Business Cards – Vistaprint.com
- Webhosting – Bluehost, WordPress, Blogger
- Website development – elance.com
- Lead Generation – Twitter, Linkedin, Facebook, Digg, Reddit, StumbledUpon,YouTube
- Verizon, AT&T, Sprint
- Mobile devices
- Starbucks, spare room, or trusty garage
- Skype Premium for group conferencing
- Virtual assistants – oDesk, many others
- CRM – SugarCRM, Solve360 or Salesforce
- Meetings and teleconferences – Skype, GoToMeeting, WebEx
- Ecommerce – Magento, bigCommerce, others
- AngelList
- Funded.com
- Personnel employment outsourcing – Insperity, Trinet
- Recruiting – Linkedin, Monster
- eLance.com , guru.com, scrpitlance.com
- India and other more competitive nations
- Outsourcing to China and other more competitive nations
- Cloud computing – Amazon, Verizon, Google
- Bloggers – OnStarups.com, hundreds of others
- Linkedin Groups
- CONNECT
- Laptops
- Smartphones
- Tablets
- Cromebook
For my last two ventures, the enablers above would have dropped first year business startup costs by at least $500,000, which changes the dynamics of startup funding options substantially. Outsourcing product development could triple those savings. It’s a game changer for today’s entrepreneur.
What’s also important is to understand that the virtual company is the new norm when angel investors are looking at how entrepreneurs are managing their business start up costs. In starting a business, to be competitive, you must now effectively deploy these enablers. Understanding Geoffrey Moore’s lessons regarding what is Core verses Content when it comes to business startup costs is key. Simply put, you must outsource everything that is not Core to your ability to delivery highly competitive products or services.
How can you tell if a company is an virtual company? Well, it’s darn near impossible. You would have to visit to determine if there is actually a physical presence. So don’t let ego impact your decisions. Manage your business startup costs. Let the numbers tell the story. Fancy offices and other symbolic symbols of success can come later, once the business model has been validated and profits are flowing.
It’s critical that you understand that this quick summary of business enablers are just the tip of the iceberg. Understand that globalization and technology will continue to revolutionize the virtual company and reduce business startup costs, enabling others, anywhere to compete in your market. Companies like Google have embraced this new reality from their inception. You must understand and embrace it immediately should you be considering starting a business.
—–
* Certain startup services, although great for bootstrapping, will undoubtedly need to be replaced by more comprehensive options prior to professional investment, legal services being at the top of the list.
