Old Content:
How To Cut Your Startup’s Costs
October 10, 2008 by Kyle BradyTags: The Internet, Web 2.0, Web Startups
As required by the FTC, a Full Disclosure is available - this piece adheres to the Code of Ethics
Well the ever-so-bright VC's thought to put out a memo to "the world" about tough times ahead. Some are even predicting a forthcoming Apocalypse for Web 2.0 itself.
So here are some tips on how to cut your Web 2.0 Startup's costs!
Tip 1: Cut the Crap
You know all those company indoor-skydiving events? Or huge launch parties? How about huge spacious warehouse offices in "posh" San Francisco that you don't need, and only fill 20% of?
Yep. You guessed it! Stop spending your precious (or not-so-precious depending on how "smart" and "intelligent" your "great idea" is) money on stupid and wasteful things. What happened to the "startups are rough" culture? I remember hearing rumors of working out of garages, the "company" being all of three people, and not having time to do anything but product/company development (including socializing).
Nowadays there isn't a "wonderful startup" in the Bay Area that doesn't have "I'm a cool hipster!" office space, 2000% more employees than they actually need, or the "employee mood improvement" accessories like nap pods or free espresso to the end of infinity.
But you probably don't have to do anything about that, do you? Because all these things are important to the startup culture, they're critical to success! You obviously can't make a widget for viewing your zombie pokes on someone's blog without having hundreds of well rested hipster caffeine robot employees.
Tip 2: Have a Real Business Model
As Ted so sagely mentions, the "business model" of "traffic first, profit/sustainability later" no longer flies. Technically, it never did, but the funding community apparently won't accept that as proposal for your latest Twitter+Digg mashup clone.
So now you have to find a way to make money. Let me suggest not responding with "Google AdSense!" or "We'll get sponsors!" because you and I both know that won't work either. You need to find a real way to make money, if that's even possible.
In the real world, real companies make real products and sell them to real people. Did you know that even happens online sometimes? Or they use their products as a middleman vehicle for other people's products, or a different one of their own. Again, who knew?
But this probably also doesn't apply to you either. Not only is no-one going to pay for a "pro" account on your Facebook-but-for-dogs site (Flickr is the exception, not the rule), but you can't charge people! That goes against all the principles of socialism and Web 2.0! It would be tantamount to treason, probably.
Tip 3: Stop Being Stupid
This third tip is probably the best of them all, and the most valuable to you and your company: fold up shop. Call it quits. Pack up. Go home. Let the fat lady sing.
Whatever euphamism you want to use, I'm suggesting you stop doing what you're doing. Maybe you can change the world with your Javascript-based social network TI-83 calculator replication website, but then again, you aren't The President of the U.S. ... despite what your mommy told you when you were little.
It's time for Web 2.0 to die, and I'm all for it. There are some companies that will remain, and some of those may even have a right to (RockYou, Slide, etc. ... you don't even qualify as real companies). But the rest need to go away, even if it 6 months for them to burn through their millions in funding by continuing "growth" (hiring their friends) and "development" (creating APIs).
Fun Times
I'd love to say it's been a fun ride, but it really hasn't.
See you on the flipside, where you're a homeless "idea man", and I'm not.
p.s. Hopefully this means that alot of the Web 2.0 hypecrowd echochamber dies off. I can always hope that my archnemesis Michelle Failington of TechFlunk disappears soon... maybe even MashablePR too.
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Update (10/11/2008 8:10am PST): I sent an email yesterday to Jason Calacanis to bother him about being qualified for my suggestions, but he didn't really appreciate it. And responded pretty terribly. So, of course, I made the email public.
Kyle can be found on Twitter and MySpace, or reached via email.
