Sunday, July 5, 2015

Startups On a Shoestring: 5 Successful Tech Companies That Were Started For Under $10,000

There’s good news if you’ve ever dreamed of becoming a future technology entrepreneur. You don’t need venture capital (VC) or even a wad of cash squirreled away under your mattress to fund the next big thing. In fact, a recent Kauffman Foundation study found that less than one percent of U.S. startups have VC benefactors. But you don’t have to tell these five bootstrappers; they’ve already parlayed a modest budget and a big dream into wealth and fame.

Code School: $0
By the time Gregg Pollack founded Orlando, Florida-based Code School in 2011, he was already a seasoned entrepreneur. “I’ve created other startups,” he says, “but the only reason Code School succeeded where the others failed is that I already had an audience for this product.” Gregg began his company one customer at a time—with no investors and zero debt, he says—by selling his services to clients who wanted to learn how to code. “See, for the 5 years before we launched Code School, I started a developer blog, a developer podcast, and I often posted free educational videos,” he says. “I was building an audience, so by the time I had a product charging for educational content, I had people who were willing to buy.”
Today, the company has more than a million users around the world.Pluralsight , which is on Forbes’ list of America’s Most Promising Companies, acquired Code School in January 2015 for $36 million.  When asked about what advice he’d give fledgling entrepreneurs starting a company on a shoestring, Gregg says, “Find customers before you start building a product. Some people call this customer validation—meaning that you find customers willing to pay for what you’re going to sell, which will validate, or sometimes invalidate, your idea.”

Craig Technologies: $150
In 1999, former naval flight officer Carol Craig started Craig Technologies, which designs software and courseware and provides systems engineering and program management support to the military, with an initial investment of just $150. Today, her company is approaching $45 million in yearly revenue. In 2013, Craig Technologies opened an aerospace and defense-manufacturing center in the former NASA Shuttle Logistics Depot (NSLD) building in Cape Canaveral, Florida.

“When starting up, it’s easy to fall into the trap of focusing all of your attention on your customers’ needs and potential business,” says Carol. “Don’t overlook your own technology needs and forget that technology should be ubiquitous in your company infrastructure.” She advises technology startups to innovate. “Look for internal options to meet your technology needs and position your business for growth early on,” she says. “You never know, the tool you develop for your own business could be the next hot product you sell to your customers!”

JAMF Software: $1,399
Zach Halmstad founded JAMF Software, an Apple device management company, in Minneapolis, Minnesota in 2002 for just $1399. That was $999 for an eMac, $350 in software and $50 for the LLC, says Zach. Today, the company is valued at a $225 million, achieving 530 percent revenue growth between 2009 and 2013. In 2014, JAMF Software was named one of Deloitte’s Technology Fast 500 companies.
“For the first 2 years of JAMF, I had a full-time job working as a desktop support technician at the University of Wisconsin, Eau Claire,” says Zach, who was finishing his bachelor’s degree in music at the time. “Around 5 p.m., we’d go to Racy’s (a coffee shop he says he still frequently works from today) and write code. Around 10 p.m., we’d move from the coffee shop to a bar across the street and finish work around midnight.” Zach says it’s important for would-be entrepreneurs to stay focused on their product. “It’s easier to build a company around a perfect product than it is to build a product from inside a perfect company,” he says. “A perfectly run business with no product has no value.”
Appster: $3,000
Mark McDonald and Josiah Humphrey were only 18 and 19 respectively when they co-founded the application development firm Appster in Melbourne, Australia in 2011 with an investment of $3,000. Three and a half years later, the company has 140 employees in three countries, including a brand new North American headquarters in Silicon Valley. Appster is set to generate $25 million in revenue this year and has its sights set on $100 million by 2018, say the founders.
“Josiah and I have been running and starting businesses since we were 12,” says Mark. “Because we were much younger our voices hadn’t got deep yet, so when we were 15 or so we had to fake deep voices and pretend to be much older on the phone,” he laughs.
“We wouldn’t recommend this to anyone starting on a shoestring budget,” says Josiah, “but we went and leased out an expensive office. It was a ‘burn the ships’ kind of moment that really forced us to take action because we had to make rent every month. Mark and I went straight to the phones and started to convince and win clients. We were profitable in our first month.”
Applico: $9,000

In 2009, 20-year-old Babson College junior 
Alex Moazed  racked up $9,000 in credit card debt to fulfill his lifelong dream of starting his own business. That company is Boston-based mobile app and platform developer Applico, which had $10 million in revenue in 2014. Applico boasts high-profile clients and backers including Disney and Google Ventures. Not bad for an investment of under $10k.
For those with similar dreams, Alex suggests starting small and not wasting any time. “If you can get a functioning product to market quickly, it will help validate the prospects of your business,” he says. “If you have the right timing, even a crude version of your product should see some traction—that’s when you know you’re onto something. From there, you can only improve and you’ll have the flexibility to make mistakes,” Which, he adds, “are inevitable.”
These enterprising founders prove you don’t need a ton of money to begin building your technology empire. Start with loads of talent and a great idea, throw in some grit and perseverance and heed the advice from those who’ve gone before and, who knows, you may be thenext next big thing.

Citation from Forbes :

1 comment:

  1. Thanks for sharing :) It's really interesting article. I thought that it must be hard to start company without a lot of money. These stories are really inspiring because I know these companies and they are amazing. I'm working at software development company from Poland and we are smaller than these companies. We can estimate app cost: Check it and let me know what you think!