Tuesday, May 18, 2010

Startup biz and development

Nowadays you cannot run a startup in the garage mode. They say, if you code in a product, and lucky you get the rewards.

If you think about and are talking some bare min stuff - Doesnt work!

You cannot sell out! I remember the same suggestion people in 2000! I cut risks under a year after

starting the angel funded B2B messaging product and bailed out in 2002, when cash dried!

At least my plan is not to run a bareshell minimum garage startup now.

For 1 yr, you need 1 mil$. I had budgeting task as well in my prev job. I handled the center as P&L. Indian cars portal costed 6 crores on paper when the launch was done, in 9 months.

I will buy legal SW. Also there would be some advt. Decent office space cost a bit. A full page India wide advt in TOI or Hindu would cost 10 lakhs and above.

Local server would cost at least few lakhs plus the hosting costs. The biz in on net! Reliance quotes a 2MBPS line at 15 Lakhs a yr with dual loop 24x7

guarantee. VSNL might quote 8 lakhs.... reason, multi GB data transfer, with images, walkin video of properties...

I would hv to sustain for a year, with staff. I have seen some space for Rs 30 to 40 k for bare shell. It costs money for a decent fitting. Employees need a cozy setup.

There is huge overhead on running costs. I need some smooth talking, glib lingua MBA's for marketing.

No investor, is willing to invest risk capital in India now. Last time I got decent sum. Not the second round. This time I have commitment by friends for 25 lakhs. But wont help. Anyway once and angel comes in, much would come in trenches fro a stake.

PSG Tech park, Coimbatore costs about 15 Rs/sqft only. But still you have to spend on furniture and systems alone. They also have a per system plan. But if you are talking of customers visiting you, forget it. That idea works only, if you want to hack code. Not for a office presence. But you need to be in Bangalore / Chennai / Hyderabad...

Once the product is stable, I have plans of having some other development too.

A ordinary ink filling station franchise is costing upto Rs 6 lakhs, plus space cost. You might get some return, if you are lucky!

Recently I spoke to one guy, who is out of job for sometime, probably he could code. When I told him the idea, he wants a stake in the co. to work rightaway - not ESOP!

Well, people dont know how to value an idea or a startup biz.

Here is my usual pitch!

The idea is a portal biz, customised portal for each seller as a SaaS ( Frontend + backed CRM + eDataCenter ). Not something like a pure classifieds framework like indiaproperty.com, magicbricks.com or makaan.com

In USA, in time of adversities, online selling was at its peak, particularly auto.

I have 15 months of online portal related with selling, experience.

Also I rolled out Indian cars portal in India, they have 300+ individuals signed up as partners with a 6 crore t/o, probably doubled in 1 year time.

Investors are ready to buy out the concept, if there is working SW...

Many VC's say show me the working product.

Well even to develop that I need space, people and money. Only a part of the development is complete @50%. I need minimum Rs 5 crores to sustain for 1 year.

That would wipe out my entire net worth, if I were to invest myself.

I have a plan to develop it in 6 months with about 20 people. I can get it done with Open Source, and some Microsoft Silverlight stuff.

Ofcourse, the usual startup time - finding space, hiring - add 45 days, min. I can bring onboard some old hands, who worked with us.

Well it is very tough to find, people would would work for free (startup) but to gain exp. That is the option, many are approaching.....


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