How to save money running a startup

http://calacanis.com/2008/03/07/how-to-save-money-running-a-startup-17-really-good-tips/

by pjharrin • 18 years ago

40 58 18 years ago

calacanis.com

fallentimes4• 18 years ago

I know 95% of what Calacanis writes is garbage or just promoting himself/Mahahlo, but these were some great tips.

pjharrin• 18 years ago

Yea, I'm curious as to what he would add to this list for running a startup in a recession

sfphotoarts• 18 years ago

Most of these make sense, but I don't really see how a 2nd monitor can save half hour a day. Also the $3000 espresso machine might be a little expensive when you can get one for $500 that's pretty decent.

lacker3• 18 years ago

I would say that's an underestimate of the value of a 2nd monitor. If you're a programmer, get a second monitor if you have to buy itself. It's worth it.

acgourley• 18 years ago

I think it depends on the OS. OSX does a good job letting one monitor effectively host several applications. I find that harder to do in windows and the linux desktops I have tried.

Of course, OSX still needs a lot of pixels to do its job, so a single laptop screen won't really help. At my current job I have a large second monitor for my MPB and find myself hardly using the laptop screen for anything.

mikedouglas• 18 years ago

It's fairly well known that multiple monitors increase productivity.

Here's one study: http://research.microsoft.com/research/coet/multimonitor/chi...

s3graham• 18 years ago

> Most of these make sense, but I don't really see how a 2nd monitor can save half hour a day

Wow, no programmers on your team?

kwamenum86• 18 years ago

With 2 monitors you can have code on one screen and browsers on another screen (if you are building a web app). With a third monitor you can have email, or a design comp. Depending on the complexity of what you are doing you may have several programs and browser tabs open. Personally, I develop in Windows, I have 2 monitors, I expand the task bar to 2 rows to accommodate more programs and quick launch icons, and I have no less than 20 tabs open in Fx or Ie at all times. Multiple monitors beats the hell out of sorting through open progs. Doesn't seem like it but the micro-savings throughout the day add up.

dangoldin• 18 years ago

I use a 2 monitor system with the task bar vertical along the center. It's hard to getting used to but definitely nicer in the end since you can see the programs open.

hs2• 18 years ago

the list mostly consists of 'spend/buy this and that (mac, 2nd monitor, aeron, espresso machine, etc) to save more money further'

those seem to be in direct opposition to the epitome of startup: steve wozniak

"All the best things that I did at Apple came from (a) not having money and (b) not having done it before"

vlad• 18 years ago

I think this quote is misapplied to the original post. He didn't have enough money to get to the next level and do things that in fact were expensive, like get access to million dollar machines (once he went to college, he did get access to a mainframe, and ran up the bill so much he never went back until he started Apple, and only went back after Apple became a success.)

Therefore, I think a modern-day Steve from Silicon Valley would in fact have at least two monitors. If he could get parts at 11 and 13 to build a ham radio and computer, he could also find or build some lcd monitors in this day and age.

I think Waz wanted to learn about everything, and at some point money would stop anyone, and cause them to re-create things in their own room. But I'm sure he would either have monitors or assemble them. For a lot of people right now who concentrate on software, though, it is cheaper to buy monitors outright.

Steve was a hardware guy. If you're a software guy, write your own software. But you will need to spend a lot of time on your butt to program, and I think that is what the post is getting at.

Also, while a design for a circuit might lose value (besides the learning experience), monitors, desks, and chairs will be used for many, many years.

sfg• 18 years ago

I find the idea of doing meetings over lunch horrible. The point of lunch is to switch off and recharge so that you can get going again in the afternoon.

Plus having an hour to recharge is more effective than 30 minutes. You may save 100 hours a year on lunch, but what do you lose in productivity and morale?

lacker3• 18 years ago

Maybe you're thinking of the boring sort of meeting that has an agenda and 20 people there. Just eat lunch with people you work with and talk about work stuff.

nailer3• 18 years ago

I don't want to eat lunch with the people I work with. Go out for a beer afterward if I feel like it, sure, but during lunch, give me solitude, sun and a newspaper.

nostrademons2• 18 years ago

You don't switch off and recharge in meetings? ;-)

johnrob• 18 years ago

What I like about these tips is that they are mostly about buying things that are one-time costs, and avoiding the recurring costs.

nailer3• 18 years ago

"1. Buy Macintosh computers, save money on an IT department"

# tail -f /var/log/messages

Oct 15 15:45:47 mike-laptop Bullshit detected.

babo• 18 years ago

I'm sorry to say but for development a Linux machine is way more productive.

dmix• 18 years ago

Expect for the learning how to use and set up Linux part, I would agree with you. I would say it takes about 10x longer for an amateur to become comfortable with Linux then OSX, which is a serious weak point in the productivity area.

mosburger• 18 years ago

I've developed professionally (like, at a company and stuff) on Linux, Windows, and OSX at my current gig. I do mostly Java and Open Source stuff like Python and Perl w/ Postgres. For me, Linux and OSX are about tied for most productive, with Windows coming in a close second. For the price, I think you'd be best off with Linux.

Having said that, I am a bit of a Mac fanboy, so they can pry my MacBook Pro at my current job from my cold, unemployed fingers. :)

run4yourlives3• 18 years ago

If he's trying to save money, why is he using the word "buy" so much?

wheels4• 18 years ago

Definitely agreed. "Learn to think cheap." has been important for us. "Money saving tips" that include Areon chairs and a several thousand dollar expresso machine are retarded. My co-founder wanted an external monitor for his laptop ... so he picked one up a 19" CRT for 5€ on eBay. We like expresso, so we have a 15€ coffee grinder and a 25€ mocha pot that goes on the stove. This isn't rocket science.

swdesignguy• 18 years ago

"so he picked one up a 19" CRT for 5€ on eBay."

Depending on what you do, a good monitor can actually help you earn money by making you either more efficient or enjoy your work more.

mkn3• 18 years ago

Not that I think all of his advice is sound, but every buy recommendation is followed by a justification of how much that item saves. Maybe you could save more through other means, but they are all, in theory, net savers.

For example, on the home economics front, I'd advise that you buy pots and pans at Target so you can cook your own meals because you'll save $15/meal/person x 3 meals/day x 30 days/month x 4 persons/household = $5400/month/household, on average. Maybe you can save more by buying used pots at the thrift store, or inheriting them from your rich uncle, or salvaging them out of the garbage, but that doesn't invalidate the point.

Your question was glib, and this is a forum for smart people.

run4yourlives3• 18 years ago

The article was glib, hence the question.

Buying Areon chairs for $1500 a pop is not a "save money" move. That's not to say that it's not a smart move but if you want to judge it solely from an economic perspective, it's got fail all over it.

sgupta• 18 years ago

I feel like this taints his motives. Prior to this post employees might have felt that Calcanis really cared about them.

"Working at Mahalo is sweet. We get Aeron chairs, 2 monitors, free food, free coffee, and free sodas."

It's still a sweet deal, but it just doesn't feel as nice when you learn that he was doing these things more for the bottom line.

johns• 18 years ago

Those things aren't mutually exclusive, they're actually quite complimentary. Nice working environment = happy, more productive employees = better for the bottom line.

Also, I wouldn't want any employee working for me that thinks to themselves, "Gee, I thought this company was being good to me but it turns out they're trying to make money." It's the whole point.

maxklein• 18 years ago

To save money running a startup, follow these tips:

1. Hire a competent but old programmer who has debt, and a wife and kids. Pay him well.

2. Hire a bunch of interns to work on your code. Pay them badly.

3. Let the interns do the unimportant stuff, under the control of the old guy.

4. When the mission critical parts of your software come, for example design or scaling issues, bring in freelance consultants to help you do this

5. Hire lit major students to write a bunch of content for you. They are cheap and good at writing.

6. Release upgrades often and publicize each release as much as you can. You don't need PR.

7. Fire anyone who believes he is a rockstar, knows the best way of doing something and insists it has to be done that way, or somehow thinks he is owed something

8. Get small offices. Make your workers work short hours, so they have time to do stuff at home, and so that they stay with your company because of the amount of freetime available

9. Make your team friendly. If there is a socially akward or shy guy who does not relate with the other members of the team, fire him

10. Get a guy whose job is to manage outsourced projects. Outsource as much as you can and hold this guy directly responsible for the results

11. Don't go to conferences, don't stay in hotels. Spend to promote your product, not to promote yourself.

12. Take the money you make and put it back in company development. Keep the teams small and unified as you grow.

13. Spend your ad money on measurable ads like adsense etc. No expensive placement ads. You can optmize then

14. Hire people on freelancer contracts. You can save on their benefits as well as the management costs for doing their taxes

15. Take the guys in the startup to strip clubs. Get them laid.

You wanted to save money, right? If you do the above, you don't need aeron chairs to keep your team happy, productive and cheap. However, it's unsexy, and some people will look down on you.

fallentimes4• 18 years ago

"15. Take the guys in the startup to strip clubs. Get them laid."

This was a great TicketStumbler company outing. I still think you should have good chairs (not necessarily Aeron). You're spending 1/3 of the day in them - get something nice.

nailer3• 18 years ago

Thanks. I bookmarked your post, which is a whole lot more sensible than Calcanis' bullshit.

Calcanis has yet to demonstrate how Mahalo is different from 1990's era Yahoo. Until he can do that successfully, we can continue ignoring him.

ojbyrne• 18 years ago

This proves my point that there are many, many people out there (no offense) who can provide more insight then the supposed "elite."

mkn3• 18 years ago

1. Hire a competent but old programmer who has debt, and a wife and kids. Pay him well.

It's actionable age discrimination, but go ahead. You gotta break some eggs if you want to make an omelette.

9. Make your team friendly. If there is a socially akward or shy guy who does not relate with the other members of the team, fire him

It's actionable discrimination and a shitty thing to do to an otherwise valuable but shy person, but he's too shy to bring this to your attention or to hire a lawyer, so it's a win-win. (Again, eggs->omelette.)

12. Take the money you make and put it back in company development. Keep the teams small and unified as you grow.

Also, breathe air, drink water, and eat food.

15. Take the guys in the startup to strip clubs. Get them laid.

Again, actionable sexual harassment, but you're a nouveau web entrepreneur and therefore not concerned about things like legal liabilities. Let IBM, Microsoft, and other old school outfits worry about things like that. Besides, you're saving so much money by doing this that you can afford the suit.

I feel like I've fallen victim to a motivational seminar version of Poe's law.

nostrademons2• 18 years ago

I was going to upvote the grandparent, and then I thought "Wait...he might be serious."

HeyLaughingBoy2• 18 years ago

<blockquote>9. Make your team friendly. If there is a socially akward or shy guy who does not relate with the other members of the team, fire him

I don't see anything actionable here unless he's a member of a protected class and can claim that's why it was done. Being shy is not protected. For that matter, it's not a shitty thing to do: he's bringing down the team. Sucks to be him, but if he's affecting productivity, out he goes.

ConradHex• 18 years ago

(#1) I'm not sure age discrimination works that way, does it? It's discrimination to not hire someone you think is too old, but what about too young?

menloparkbum• 18 years ago

15. Take the guys in the startup to strip clubs. Get them laid.

Getting your team laid AT a strip club does not sound like a good way to save money. Even without the, uh, soliciting of prostitution, I shudder to think of the strip clubs where one goes to "save money."

9. Make your team friendly. If there is a socially akward or shy guy who does not relate with the other members of the team, fire him

The startups I've worked at always had quite a few shy, socially awkward types (I've worked mostly at tech startups). We usually just invited these folks out to lunch and social gatherings and made them feel a part of the team. Perhaps we weren't being very economical...

gaius• 18 years ago

Shy and socially awkward in the "real world", fine. Shy and socially awkward in a crowd of hardcore geeks is cause for concern IMHO.

mixmax• 18 years ago

I think there are a lot of weak points in the article.

- Outsource all HR, he even calls it a no-brainer. To me outsourcing the well-being of your employees, probably the most important asset you've got is downright stupid.

- All this talk about saving five minutes by having in-house great coffee instead of lettin gpeople fo to Starbucks, having meetings over lunch, etc. misses an important point and tells me that this guy has no idea how to deal with human beings. Your employees don't go to Starbucks just to get a coffee, they go to get a break, to ponder over a problem, have an informal meeeting, or something else. It's not about the coffe. Same with lunch. People need breaks, particularly people that make their money by thinking. I read a post by Joel Spolsky where he claims that he probably works around 4 hours a day, the rest of the time he just goofs around trying to get his thoughts together, thinking over a problem, etc. And he seems pretty productive. People aren't machines - if you treat them as such expect results thereafter.

Jeez...

fallentimes4• 18 years ago

I think by outsource HR he meant all the documents/401k/tps stuff, not the actual hiring & interviewing. Calacanis has mentioned before that he personally interviews everyone. This obviously could have changed.

notphilatall• 18 years ago

The last comment shows me how out of touch Calacanis really is:

"Outsource to middle America: There are tons of brilliant people living between San Francisco, Los Angeles, and New York who don’t live in a $4,000 one bedroom apartment and pay $8 to dry clean a shirt–hire them!"

Hardly anyone pays $4,000 for a one-bedroom in SF, and if they are they're not working for a startup (or shouldn't be). For reference, I pay $1k in rent and have my own room and a backyard in SF.

Also, you _need_ to be in the same locale as your colleagues. especially in an early stage startup. You need to see people's facial expressions during brainstorming sessions and after idea pitches. You need to read their moods and work with them on a personal, in-person level.

I've worked with outsourced teams in India and the Ukraine, despite the talents of my foreign colleagues things NEVER went as smoothly / quickly as they would have locally. Especially with a fast moving early stage startup, that's of the essence.

noonespecial• 18 years ago

Disagree on the phones. Buy a pc, a digium card and a few lines and spend a weekend setting up asterisk. It does not instill me with a lot of confidence when I call a business and get some guys garbled sounding cell phone voicemail instead of "Thanks for calling X...." and being able to dial a real extension. (Even if said extension just forwards to his cell.)

Prrometheus• 18 years ago

I am in grad school and need to live frugally so tomorrow I am buying a $4,000 espresso machine.

Retric• 18 years ago

A 4k espresso machine is not for one person. If you have 20 people they might spend around that much a month at Starbucks. (10$/day) But I still think it's a perk and has little to do with saving the company money in the short term.

jamiequint• 18 years ago

Don’t buy a phone system. Savings? At least $500 a year per person..

Uh, maybe if you've never heard of VOIP. $39.95/mo for an entire company plus $0.03/minute.

jsstrayer• 18 years ago

Billions of dollars could be saved by businesses everywhere if they were to migrate away from Microsoft products. It is a fact that Individuals and Businesses alike pay Billions of dollars in Microsoft Software Licensing and Computer Security alone. Clear and viable alternatives exist today in what is termed "Open Source Software". A number of viable alternatives exist under the generic name "linux" in which the expense is optional or "Free". For those individual users requiring additional assistance the optional support License average around $80 U.S. currency. Linux is an extremely "User Friendly" Operating System which by itself is not only easy to install, use and Update, it comes complete with "Open Source" Microsoft Compatible Desktop Utilities to replace those commonly used and relatively expensive applications such as MSWord and MSExcel Word Processing and Spreadsheet applications. In addition to these, a complete array (literally thousands)of readily available, easy to locate, install, use, update or even un-install just by selecting / de-selecting a check box!And most are equally functional to their commercial counterparts!. Applications such as Games, Educational Applications, highly useful Computer Utilities and Internet Applications exist TODAY. Not only is Linux easy to use, is well known as being invulnerable to attack by Computer Viruses. The fact that additional Billions of dollars are spent on System Security as a result of these omnipresent and dangerous Computer Viruses should be enough for the average PC user and business owner alike to see the value at hand. In just minutes, any computer system can be converted to the Linux Operating System by even the least savvy Computer user. As if we need any additional reasons to switch, Linux will outperform Windows which is like going out and buying a faster computer, without actually going anywhere! Do yourself and your pocketbook a huge favor by converting to any of the number of Open-Source Linux Operating Systems. I personally recommend "UBUNTU Linux" for any user. Not only will you have a Desktop Operating System that is much faster and easy to use, you will have removed that "Virus Target" from your PC as well....

How to save money running a startup

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