- Founding An Investment-Worthy Startup For Less Than $100
1 hour ago·14 min read
One of the biggest problems for startups is having a low budget. So how can we set up a startup with a budget of one hundred dollars, that when we finally approach investors, it will astonish them and manage to raise the money it needs for the development?
Written by Efrat Shalem, CEO & Founder of EQUAL
Photo by Kindel Media from Pexels
Here’s a fact: Not all of us were born into a rich family. Most of us have to rely on our own resourcefulness to build things from scratch and make them work. So like many others, I too have encountered this low-budget problem, and asked myself — how can ambitious entrepreneurs, with no financial backing to carry their dreams on, set up a startup and turn it into a success story?
If you really think about it, entrepreneurship has always been a difficult thing to pull through, in every era in history (even if the entrepreneurs had a lot of money). Therefore challenges are not barriers, they are forging tools. If you look at entrepreneurs who have come from mediocre and destitute backgrounds — to the status of billionaires such as Steve Jobs, Jack Ma, Oprah Winfrey, and Richard Branson, history proves to us that getting from the bottom to the top is entirely possible, no matter how many naysayers you’ll encounter on the way. So how in a time when the world is flooded with competition and technology companies with deep pockets attached to them, can you still give the world a real fight of your own?
The answer is to bypass. What does it mean to bypass? Find indirect ways that will allow you to create the “WOW” effect with potential customers and investors without tearing up your pocket, and save your money only for things that you realize you have no way to get around. If there is one thing that investors need to be impressed with, it is your ability to utilize resources to the maximum while minimizing spending, because one day it will be their money on the stake.
So let’s get down to practice: Here are some tools I personally used in setting up EQUAL that helped me to run it smart financially and not to spend more than $100 for an entire year (!) on business strategy, product management, design, and marketing — and reach a qualitative, functional and tested prototype ready for initial investment and development.
Before you start spending money and energy, you should have as many reliable and experienced people as possible exposed to your business idea. With their help, you can formulate a business strategy, which will basically include the problem or need that the product is trying to solve, its solution and competitive advantage, the target audience and market size, and how you are going to make it generate money.
On What NOT to Spend Money
Business model — first of all, you need to understand why, what, to whom, and what your venture looks like. For this purpose, use Lean Canvas (a business canvas model), which is a completely free tool, and see a complete picture of your venture. Throughout the venture’s life cycle, keep updating the table and adapting it to the changing reality, so that you can give informed business answers to yourself and potential investors (who you can be sure will cross-examine you).
Business Consulting — Before you run to business consultants, read as many articles as possible, look for videos and podcasts, and sign up for professional webinars. For almost anything you need, there’s someone who has written about it somewhere or is giving a free webinar to promote their business. If you still want a business consultant who will provide you with their knowledge and connections regularly, make sure that he or she has the right experience, and only after several months of engagement and quality cooperation between you, give up to 1% of your venture for their service.
Legal Advice — There are quite a few free lawyers’ webinars and blogs that will give you a basic understanding of what you need and what you should avoid as an entrepreneur. Also, there are sites that will provide you with standard legal templates for free! Of course, these do not replace legal advice that’s tailored specifically to your venture, but you can even find lawyers who will be impressed by you and your startup enough that they’ll be willing to provide you with legal assistance with no fee — unless you get funded (then, they will add interest, of course, they’re still lawyers, but by that point, you’ll have enough money to pay them (;).
Accelerators — these are not mandatory, but if you have already decided that you want to enter an entrepreneurship program that will accompany you at the beginning of your startup, so you can get first-hand knowledge and feedback from people in the industry, there are plenty of such programs, but you better screen them well and pick the right one for you and your startup’s industry, so you can leverage the connections you’ll get there in the future. My personal suggestion is, to go for a completely free program (i.e. zero-equity and/or fee) that also chooses you carefully, with experienced mentors who are really in it to help you succeed.
Networking — Search for and join online communities for free and consult with other entrepreneurs so you get information regularly on almost anything you ask. There is always someone who has already experienced what you are wondering about. Also, there are dozens of networking events each week that will connect you to the right people and complete the knowledge you’re lacking, and may even join you on your journey. You can find and sign up for such events on relevant Facebook pages and groups, and on dedicated online event sites like Meetup and Eventbrite.
While it is wise to learn from experience, it is wiser to learn from the experiences of others. ― Rick Warren
Meetings — You’d be surprised, but here the Corona Virus really did entrepreneurs a favor. Nowadays, you are being spared of renting an expensive office for business meetings, since most of them were transferred to Zoom or Google Meet, and the basic meeting feature you need you get for free (and between us, that’s all you really need). And how do you set up free appointments in style? There are simple schedule programs to use like Calendly that will not only save you money but also time trying to coordinate suitable times.
Task Management — for each area of your startup company, it is recommended that you build a dedicated folder in your drive that you’ll be able to share online with consultants and partners, as well as a dedicated tool for managing projects on neat dashboards. I personally use Trello‘s amazing tools for free, and you can find more effective tools here.
It may surprise you, but time is the most precious commodity we have, not money. What we do with this time will determine whether our venture will succeed or fail. Today there are many tools that can allow us, even on a low budget, to reach the first cornerstone of any startup, which is proof of concept.
Proof of concept, also known as proof of principle, is a realization of a certain method or idea in order to demonstrate its feasibility or a demonstration in principle with the aim of verifying that some concept or theory has practical potential. A proof of concept is usually small and may or may not be complete. — Wikipedia
There are a number of practical ways to prove that there’s a market need for our venture: this could be a Facebook or a LinkedIn group, a site that simulates the activity of our product, or a prototype of an app that we can let users experiment with and adjust accordingly.
On What NOT to Spend Money
Mockup — Mockups simulate functionality and allow users to experience an interaction with the product as it would look and feel like in the real world. You do not have to be a certified designer to prove a point. You can create a mockup of your app or website by designing screens with free design tools like Canva (just build a template based on the screen dimensions you need) and then upload them to free mockup tools like Invision that will allow users to click on hotspots and navigate the product screens as if it was the real thing. You can find additional no-code tools here and you should also join dedicated no-code communities on Facebook for experience-based recommendations. You can also set up your own Facebook group, explain its purpose and see if people are engaging with it.
Usability Tests — Once you set up a “research group” from potential customers to test your mockup or online community, create questionnaires to test their user experience. To do this, you can use Google Forms for free or ask questions in poll posts on Facebook or LinkedIn.
Development Backlog — At a later stage, when you have already formulated a product strategy, you can create a free table in Google Sheets that lists all the features of your product, what they should do, who’s their target audience, and rate their business importance (how necessary are they for your prototype) — so those who will develop the initial product have a detailed development plan for two product versions at least (and you’ll save a few thousand dollars).
Whether you’ve lost your mind like me and decided to spend half a year learning to design your own prototype from videos, or whether you found a designer for a small fee or equity, there are design tools that will allow you to save — a lot! A designed prototype can cost tens of thousands of dollars, and I personally managed to design mine completely for free by myself — getting standing ovations from anyone who was exposed to it. So if you have a flair for design, it is completely possible to design your prototype on your own and add a professional designer down the road.
On What NOT to Spend Money
Brand colors — listen, this is going to make your life easier! Before you start designing a logo, posts, website, app, and the devil knows what — choose a color palette that matches your brand values. For EQUAL, for example, I chose green as the main color because it is a social enterprise that also helps the environment. There are several tools for creating an online color palette, I recommend Color Hunt which offers you, based on the wisdom of the masses, a variety of beautiful color palettes. After you get inspired, you can also create your own palette and get the codes of the colors you choose, for free of course.
Logo — While branding is much broader than a logo, a logo is a must, even if you are just starting out so people will identify with your product. I used Looka‘s site to create my initial logo, and there are many other similar sites where you can create your first logo for cheap until you are funded (since a logo can also cost you anything from a few tens of dollars to hundreds).
Prototype — Decided to design it on your own? Look for videos on YouTube about product design and you will even find professional courses for $20 on Udemy. For the design itself, Adobe XD will allow you to create a real app or website prototype for free, one that you can send directly to development when finished. But first, do usability tests as I explained above about the mockup, only this time, increase your research group and also present it to the programmers that will develop it for you. Experienced programmers have already seen many applications and websites and can give you both technological and business feedback.
Icons and illustrations — Every site and app requires them (mine required a lot). Here are some platforms from which you can download icons and illustrations in any field, and then if you wish to, keep editing them in Adobe XD for free! Thank me later:
- Date of publication:
- Tue, 02/23/2021 - 14:51
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