You know the moment in a start-up’s life where, if you need to buy toilet paper, you need to check your Excel charts to see if you can afford it? Well, that’s where we are. To tell the truth, we are not checking for toilet paper, but we do consider every software/service that we decide use and need to pay a considerable amount for.
Our lead investor told us that, from his experience, giving the investment money in chunks forces the entrepreneur to think: creativity, creativity, creativity. In the beginning, I thought that Yotpo is a creative start-up by definition and we don’t need any more enforcements. Well, I don’t know what would have happened if he didn’t do it, but here are some of the creative ways and methods:
Research & Choose: Whenever we want to do something new I’m always amazed from the amount of software out there to help you do so. It doesn’t matter if we want to do an email survey, email campaign, social management, video creation or even setting up a good homepage. Sometimes you feel like a kid in a candy store. We spend a lot of time testing and researching (I recommend the Lean Startup group for questions and recommendations) every option out there. I’m not sure if we spend a bit too much time testing tools, but it saves us a lot of money in the long run.
Free it till it Hurts: It doesn’t matter which program/service we want to use (MailChimp, Performable, Wufoo, an upgraded LinkedIn account and so much more) we take the free trial, and use it until we actually feel we just have to upgrade our account to get the best value in return. We also made some mistakes by paying before we tried the service just because of a kick-ass video we saw … a big no-no.
If You Can’t Pay Monthly, Don’t Pay at All: In my opinion, because of the massive adaption and changes we have at Yotpo every day, we just cannot pay for something a year up front. I’m not 100% sure how our product will look in a year from now; no, let me rephrase: I’m 100% sure I don’t know how our product will look like in a year from now. How the hell am I supposed to know which services will be needed? Don’t get me wrong, I will probably need an email service a year from now, but I don’t know if a really disruptive new start-up will launch a kick-ass one or if we will actually need a very specific service. Make sure every dollar you spend is in the right place and at the right time.
The Art of the Outsource: From time to time, you will find out that outsourcing a time consuming task is actually a good idea. Don’t do it often, but sometimes it can save you both time and money. For us, we outsourced the CSS/HTML of our current homepage; we thought that our time and energy should be invested in our core system. I really recommend Elance for outsourcing and here is a small tip how to save money: go to all the bidders who have 0 Credentials/Reviews. Look at their work portfolio; if you like it, tell them you will be the first one to review them and ask for the work at half price. In my experience, they will be eager for the first good review.
Networking as a Money Saver: Because we are two young entrepreneurs, Yotpo is our first big experience in the entrepreneurship world. One of the most important things I’ve learned is that from good networking you can receive smart marketing advice, sales introductions and even recruitment solutions. The surprising thing I found out is not that it’s free of charge, but that the result is sometimes much better than a paid service.
The Team & Tools: Looking at it now, there are two main things we spend money on: The first one is the team. We actually offer pretty high salaries for a start-up at our stage. I think that is the best usage of our money, paying some really awesome R&D Ninjas (yeah, we’re still looking …). The second thing that we spend money on is our computers. Our first computer just burned out (after replacing the fan 2 times) and then we came to a conclusion that from now on our company computers will be the best out there. We really believe the R&D team should have the best tools possible to develop our product and these two things, team and tools, need to be top notch to ensure a smart start.
There are a lot of good and creative ways to save as a start-up. How do you bootstrap?