I attended Alphatech’s Capital Savings and Raising event as part of the Forward Technology Festival on Monday night and it got me thinking about all of the ways we’ve hustled in our startups over the past six years. In a startup, every dollar counts. You you need to find creative ways to stretch every single dollar as far as you possibly can. Most people know about the lean startup method, so I want to focus on some nonstandard ways to save money. Here’s a few things we’ve done to conserve precious cash.
Share office space with other startups
We contacted a few startups in Madison and told them we were looking for office space. One of our friends told us they had an extra room in their office that they would rent to use cheaply. We ended up with prime real estate on the capital square in Madison for $200 a month instead of $600+. The space was big enough for 8 people at a time.
Our best money saving idea was to hire University of Wisconsin interns. We did not pay them a salary, but we gave them oportunities to earn money. We also showed them that they had real responibility and could actually affect the company on day one. People are not always motivated by money. They can be motivated by responsibility, recognition, learning, entertainment and a ton of other things. Search out what motivates your interns and give it to them. We made sure that our interns were learning something new every single day and that they were contributing to the company from the very start. One intern suggested a new features on his first day. Two days later, we pushed it to production. Another intern wrote a blog post her first day. I’m most proud of our intern program over anything else we accomplished at Entrustet.
Play the startup card
Companies know that startups usually don’t have much money and that they need to stretch every single dollar. They also know that if a startup grows and earns money, they might have a large client in the future. We always asked if we could get a discount on services since we were a startup. We got all sorts of discounts simply by asking. It cannot hurt to ask. The worst they can say is no.
Services for Equity
I’m a big fan of services for equity deals. I’ve done them in both of my startups and its worked out really well. Find a service provider who believes in you and ask them if they’ll take some of their compensation as equity. Saving money at the beginning on expensive professional services is key.
Use your Entrepreneurial Network
I am not a programmer, so when I have technology questions that I don’t want to bother my tech team with, I reach out to other entrepreneurs in my network who can give me advice. When my tech friends have questions on PR, advertising, marketing, business models etc, I help them. Instead of paying for outside help, share with people in your network. Make sure this is not a one way relationship so you are not taking advice for free.
You can use design options like Crowdspring or 99Designs, but be creative. Think of ways to crowdsource other aspects of your business. We hired a copy editor who charged us about $1000 to read all of our website copy and a few of our blog posts. It was expensive. Next time we needed copy help, we told everyone in our office that they had to read the website. We put a bounty of $5 or one free drink for each error they found that resulted in a correction. We found around 30 errors on the site and paid $150 for copy editing instead of $1000. Plus, it brought our team together.
Keep and active blog and use social media
Our blog on Entrustet generates over 40% of our traffic. After we created the content, it’s completely free lead generation. We also had two of our posts go viral, spiking traffic and getting us a ton of press. Blogging takes time, but I think it’s worth it.
Play the Student Card
While I was a student, I always introduced myself as a student entrepreneur. People love students who are running businesses and it opened doors that are now more closed to me now that I am not a student anymore. Our student interns were still able to play the card from time to time and received discounts, extra information and benefits.
Buy in small quantities
It can be tempting to buy more units of something for a lower unit price, but in a startup it’s better to buy just what you need right now. I still have keychains, schedule magnets and spray chalk from Exchangehut three years after I sold the business. Complete waste of money.
What have you done to save money? Do you have any funny stories? Any techniques that really worked for you?