Back in ’09 I wrote The Bootstrapped Office. At that time we had the simplest, most basic work spaces at our warehouse and at home. As should be the case, there were a million things more important than the aesthetics of our office:

Thing is, our customers will never see our work area. So when things go good for us we invest in better technology, employees, new product lines, new marketing initiatives, and a little bit in ourselves. Those things matter in our business. The aesthetics of a work area don’t.

That was 100% true back then. The office was incredibly basic. When we first moved in we put new flooring in, but otherwise we just left it as-is. Now, as we’re bringing in more employees and we’re more profitable (i.e. we’re looking for write-offs), we finally decided to turn our tiny office at the warehouse in to a real office. This year we had the new heating system installed (which included a new electric heating system for the office), replaced the light fixtures and ceiling tiles, painted, replaced the molding, and finally this past week purchased new desks and chairs. The result is the photo above.

Mike has some before and after photos on his blog from the weekend in 2008 when he and Greg put the new flooring down. Let’s just say the room didn’t look very good back then. Here’s an example:

It took a while, but it actually feels like a real office now. We turned a pretty ugly room that hadn’t been used in years in to a rather serviceable office. It looks nice and it’s comfortable. We’re working on some custom Pure Adapt artwork for the walls to really tie it together.

Things like this might seem minor, and to some extent it is a minor improvement, but it’s just another sign that we’re moving out of that crazy-insane-bootstrapped-start-up-mode and in to a more stable situation where we can spend a little more time on some of the secondary things like this that make for a better work environment for us and our employees.

Diaspora has all the wrong things at the wrong time. Competition that kills isn’t pre-announced — it catches an unsuspecting incumbent by surprise.

In particular, I found one of his points to hit home:

The spotlight is on too early
You want attention after you’re good, not before. Obscurity is your friend when you’re just starting — especially when you don’t even have a product yet. You don’t need the pressure of outside opinion or the press breathing down your neck before you have anything to show. Millions of eyes — including your competition — watching you every step of the way doesn’t help. All this attention is a distraction. Ship, then seek the spotlight.

I’m going to go out on a limb and say that every single piece of software – web or otherwise – that has ever been released in the history of computers has been buggy at first. We’ve had a pretty disastrous start with LockerPulse from a product standpoint. We’ve had every potential hardware and software problem that I could have imagined. The site has been unstable as hell.

Some people might look at this as a bad thing, however, because we did a small “beta” launch, we were able to get real users on the site, get real feedback, observe what worked and what didn’t, and then begin to fix things. You’d think that because we’ve launched a lot of websites over the years that we wouldn’t need time for this stuff and that we could just go full blast with the site from day 1. It just doesn’t work that way, especially with software almost 100% built in-house that has never been used in a live environment before. It has been a little worse than I had expected, but then again I wrote this just before launch:

We’re going to do a “public beta that we’re not calling a beta” for a few months and then go from there. What does that mean? We’re going to be giving out free lifetime premium accounts to a bunch of people we know (friends, their friends, family, people we know in the web business and sports business), we’re going to be testing a micro social media campaign to gauge it’s effectiveness (we think Twitter is maybe our best marketing opportunity), we’re going to be soliciting feedback and collecting data, and then we’re going to go from there. We have a laundry list of things that we want to do, but none of that matters if the first 50 people that try it think it sucks. This is an app on a level that I haven’t built before, so it’s important to make sure we didn’t royally screw anything up before going too crazy. Right now it looks like we’ll be adding 50k – 75k stories per month to our database. There’s a lot that goes into making that work efficiently.

Now, some 40 days later, we’ve worked out some serious coding issues, made some changes to appease some of the major content providers, completed a UI redesign, and moved to a much better server*. We’re getting close to the point where we have the kinks worked out and we’ll be confident spending some time and money to market the site. Imagine spending thousands of dollars for some big huge launch and then realizing that your server couldn’t handle the site or that half of your users couldn’t use your interface?

“Obscurity is your friend when you’re just starting.” I love that quote from Jason. This past month has been tough on me, but it would have been much worse if all of the problems were exacerbated by gobs of traffic. If the site is slow/down, I might get an email or two. If I got a few hundred it would be a different story. Then you’re playing disaster control with your customers AND trying to fix a bug.

Big huge launches are sexy, but they aren’t very practical, especially for a small bootstrapped software project. Slow and steady wins the race.

*Originally I had picked out a VPS to start development. I thought we could launch and be OK in that setup for a little while, but it became evident that we needed more power and even more flexibility should we grow the site quickly (no one wants to fear being too good at marketing, it’s hard enough as it is). Our hosting provider, LiquidWeb, who we’ve been with for years and I’m very happy with (no downtime…ever), worked with us to transition the site to their new cloud product, Storm. This gives us the ability to add RAM or a CPU or even a load balancer with a click of a button, something I think is necessary for a site like this. I had originally considered Rackspace Cloud and Amazon EC2, but Rackspace had too many downtime horror stories (see TechCrunch), and Amazon didn’t have a level of support I was comfortable with. Cloud servers are the way to go for web apps now a days, so I’m happy that LW is finally offering an option that works for us.

I tell this story about our VC experience to a lot of people – it seems to be a subject that attracts great curiosity and I, of course, love to share. Most of the time, folks follow up by asking “are you disappointed?” and my answer has been the same since October. I’m not disappointed we didn’t get funded. In fact, the more time passes and the more I think about the pitfalls that could have come with another round of investment, additional board members and pressure to reach $75-$100 million in annual revenue, the more I’m glad we didn’t. However, I do regret the decision to seek funding – it cost our team countless days and weeks of productivity, took our eyes off our primary goal of delighting our members and customers and, in the end, was a learning experience with a shockingly high cost.

I recently discovered snailmailr, a nifty website that lets you send real mail (i.e. “snail mail”) online for only 99 cents per letter, postage included.  As you can see from the picture, the interface is dead simple.  You can write your letter with their online editor or you can attach a Word Document, PDF, Powerpoint Slide, etc.  They use laser color printers, 100% recycled paper, and even purchase carbon offsets for their paper use.  And it works internationally.  You can opt to pay 10 cents extra to have the snailmailr.com logo removed from your envelope, and you also have to pay about a quarter extra for every page over 2 pages, but that’s still pretty reasonable.

Cool right?  I mean, there are definitely times late at night or in crappy weather when I’d rather spend the 99 cents and fire out a letter like it’s an email and be done with it (in my apartment complex the mailboxes are quite a walk).  I also don’t always have a printer available.  I can see how this could be incredibly useful for someone who is constantly traveling, especially internationally.  Or if you rarely send letters and don’t feel like keeping stamps and letters in stock.  Or if you flat out don’t have a printer.  It really is useful in a lot of scenarios.

Here’s the best part though, the part that left me kicking myself and will probably do the same to you:  the startup costs for this business are almost zero.  Any of us could have done this.  It serves a pretty big need. One that amazingly isn’t really being met elsewhere.  I’m almost stunned that no one has done this before.

Granted, a laser printer costs a few hundred dollars.  The paper costs a few bucks, as does the postage.  And you have to be reasonably tech savvy to throw together the website.  But nothing that any of us couldn’t have taken a legit shot with for under $1k.

I did some searching and wasn’t able to find out who started it or who has funded it (other than some guy named Kevin who left a comment on a blog post review…Kevin if you’re out there, drop me an email).  But there’s no reason that this couldn’t be started by a student or part-time entrepreneur.  It’s one of those rare examples where the startup costs are low but the upside is very high (and scalable). 

The downside is of course the low barrier to entry.  Can anyone think of a better way to do what snailmailr is doing?

After I posted about my Broncos tickets arriving, reader Jakob quickly notified me to cover up the bar codes on the two tickets I showed in the image.  I emailed him to thank him and we got into a pretty interesting conversation about a business he just started.  The business is a real estate photo service in San Diego called Rancho Photos.  He’s a full time engineering grad student in San Diego, so he’s able to do this while still meeting quite a few other responsibilities. Here are a few interesting quotes from our conversation (republished with his permission):

Getting that first phone call was such a rush.  I’m still amazed how easy it was to get this business going.  Put up the website, run some adwords ads, boom people start calling.

Maybe [you doing a blog post about it] will get someone else to take that leap of faith and start their business idea.  It really is super-easy to get started.  You have all these people coming up with business ideas.  Why not at least try?  Worst case, you’ll learn a ton, have a great story, and won’t ever wonder, “what if”.

He’s a perfect example of just how easy it can be, especially if the company is a local niche service like Jakob’s.  Sometimes people (myself included) tend to over-analyze or over-plan.  In business, you just never know what will work and what won’t, so the best solution is to just give it a shot with as little upfront time, effort, and money as possible (see my Funding Your First Business post for more).

If it works and generates revenue, you’ve got a business you can grow and expand based on your early experiences (instead of hypothetical “what if’s”).  If it doesn’t, you can move on to other opportunities without having spent a ton of time or money.

Being that we’re a bootstrapped company, our work areas are more focused on simplicity and affordability and not so much elegance and creativity. It’s all about setting up areas that get the job done. We need to be able to do our work comfortably without distraction. Nothing more, nothing less.

Here’s what my desk at the warehouse looks like:

A $40 table from Walmart, an old chair from my parents house…and nothing else. Space for my laptop and a few other things. We painted the walls and put in the flooring ourselves.

At home it gets a little more “robust”:

That printer was $99 about 5 years ago and is in dire need of being replaced (then again, I print like 20 pages/year so…). I spent something like $60 for the mesh chair on clearance at Office Max, which is super comfortable on my back. The table is my parents old kitchen table. And the rest of the laptop docking setup, as explained in a bit more detail in my Pimp My Desktop post, was very affordable and is highly functional for what I do.

Some people would look at those workspaces and see a million ways to make them “better.” Thing is, our customers will never see our work area. So when things go good for us we invest in better technology, employees, new product lines, new marketing initiatives, and a little bit in ourselves. Those things matter in our business. The aesthetics of a work area don’t. Now, if we were a financial planning company that had clients meeting at our office daily, it would be a complete 180 – the aesthetics of the website wouldn’t matter nearly as much as those in the office.

If you’re starting a bootstrapped business, every penny matters. You have to be able to identify which expenses are necessary and which ones aren’t.

It’s a common position for potential business owners to be in.  I think a lot of very talented people that would start successful businesses get scared away by the financial uncertainty of starting their own business.

My advice – eliminate all of the uncertainty by using a job to fund yourself. Here’s what I would do if I was graduating today and starting out again from scratch tomorrow:

1. Get a non-career job where you can work 30 – 40 hours/week and make enough money to live off of. It might not impress your parents, but that job bartending or waiting tables or being a barista or bank teller is going to afford you the opportunity to do what you truly want.
2. Pick a potential business idea…then start a related service for under $100. Let’s say you’re like me and want to run lots of successful web apps.  Starting a web app from scratch and building it to a point where it brings in solid revenue is very difficult and many times doesn’t work out.  Instead, start a web design business first.  $100 gets you some business cards, a simple website, and a Skype phone number.  Throw and ad on Craigslist, work Twitter and Facebook, go to a few local networking events, and whatever else it takes to get your first clients for free.   For more ideas, check out my post How To Do Client Work Right that I wrote just after we got rid of the service side of our business.
3. Use the remaining time to work on your “ideal” business. If you still want to build that web app, take advantage of all of the free time that you have to slowly-but-surely build it without the stress of needing it.  Build something that has true value to people, even if it takes a year or two to do it.  The more stress, the more you need a web app to succeed, the more likely you are to press and make drastic changes instead of being patient.  Great websites take years and years to build.
4. Pump profits from your service into growing your “ideal” business. Since you are living off of your job, you can “reward” yourself by spending some or all of your service profit on growing the web app.

Here’s how your average week likely breaks down:  30 – 40 hours working, 15 – 25 hours on your service, and 5 – 10 hours on your ideal business.  ~60 hours is no joke, but it’s also not a bad deal for how much benefit you’re getting.

This is a very low risk, high reward path that gives you TONS of future options:

• If things don’t take off, you can try again or get a career job.
• If the service grows, you can quit your part time job or stop working on the web app.
• If the web app grows, you can stop providing service or quit the part time job.
• If they both grow and you can cover your living expenses, you can definitely quit the part time job!

There are several advantages of taking this approach:

1. There’s no time limit. Totally flop after trying for 6 months?  Start over without any real penalty.  You still have your job so you can take a few weeks off from entrepreneurship and then get back into it when you’re ready.
2. You’re financially stable. You don’t need to worry about owing creditors thousands of dollars because you’re advancing yourself cash to live while the business struggles.  By keeping your business money separate from your personal money, you really do eliminate any real financial risk.
3. By bootstrapping, you learn the importance of every dollar. I love the fact that we’ve never taken outside financing.  We’re pretty minimal in our spending.  We value every single sale we make.  Would we be nearly as stingy if we had $1M from a VC to play with?  Probably not.  We also probably wouldn’t be nearly as efficient or nearly as successful.
4. You keep your motivation. Nothing keeps you more motivated than doing a job that you don’t want to do every day!  That annoying customer who badgers you all night and never leaves a tip?  He’s the reason you work so hard after work.
5. You’re learning constantly. No matter the business you work for, you can learn things.  What do they do that works?  What doesn’t?  How would you do it differently?  You’re getting paid to learn.  Those clients you work with are the same.  To do good work for them, you’ll have to work pretty hard to learn the intricacies of their businesses.
6. You avoid living in a bubble. Running a business solo can be lonely.  I know.  Working a job gets you out of the house, gets you some social interaction, and builds some relationships.  Same goes for doing service work.

My business partners and I sort of did these things, mostly by accident.  I got a job with the intention of funding SportsLizard, but it was a career job and became too conflicting.  Mike and George worked part-time jobs to bridge the gap as they got their start.  Greg was still going for his MBA while he was starting out.  I did SEO service work to keep myself afloat while I tried to grow my websites, which eventually led me to my current partners.  George and Greg did physical detailing to fund Detailed Image.  All along the way, the knowledge we learned from all of those experiences has cumulatively helped us in every aspect of our business.