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Entrepreneurs, angels, and the cost of launch - Signal vs. Noise (by 37signals)
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"This is Signal vs. Noise , a weblog by 37signals about entrepreneurship, design, experience, simplicity, constraints, pop culture, our products, products we like, and more. Established 1999 in Chicago.
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Entrepreneurs, angels, and the cost of launch David 30 Jun 2005
61 comments
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Joe Kraus from JotSpot has a great piece on how the last ten years has reduced the price of doing a startup from three million to a hundred thousand dollars for him. That’s definitely an interesting development and Joe is highlighting the right trends. But since Joe is coming from a company launched on angels and running on VC ( $5,2 million , no less), his side is only one side of the story.
As part of a debt-free company that didn’t need angels to launch and is operating on revenues instead of VC, I naturally have a somewhat different perspective. I think the most interesting change in this economy is what can be done with little or no explicit investment at all. The products that emerge from the constraints of prior commitments. Like being a student, working for clients, or being just a regular old employee.
Now that all the fixed costs are gone, you’re left with the requirements of time and passion. While those resources (or at least one of them) can be bought by setting up shop and saying “we’re doing it”, they can certainly also be had outside the typical startup atmosphere. And I think that story is actually a lot more interesting since its not just lowering the costs of an existing model, it’s throwing it out and opting for a new one entirely.
As mini-investments from VCs and angels become the next big thing, I hope more crews will think hard and consider whether they could do without. Look at the project that costs $100,000 and figure out how to make it cost $20,000 over the shoulders of three guys. Do it out of your o"
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