Five Things NOT to Buy When Launching Your First Digital Startup
Learning from My Mistakes Five Years After Starting my Business
I started PeopleFish in 2016.
People often ask “What’s the biggest thing you’ve learned?”
That’s a hard question to answer. I’ve learned so much, but most of it is very unique to my circumstances — lessons and advice I’d give to myself five years ago, but may not apply to other people’s situations.
Except, that is, when it comes to wasting money on useless startup services.
The fact is, I’ve wasted a TON of money on unnecessary things. Things I purchased when I had extra cash but no plan, or because some salesman sold me on the “prestige” of whatever they were selling.
I don’t want others to make these same mistakes. Here are five things I recommend you not buy when launching your first digital startup.
1. A Regus (or any) Virtual Address
I made this mistake. A $1,680-over-two-years mistake.
Sure, $70 per month doesn’t sound like much. Especially when you’re just starting out and don’t have many other expenses. Don’t all businesses need a “professional” address? Isn’t it tacky to use your home address on business correspondence? Don’t entrepreneurs have better things to do than go check a mailbox every day?
The answer to those questions is yes. But the solution is not an overpriced, unpopular, hard-to-break lease with a virtual office you’ll never visit or hear from. Instead, grab a PO Box. It’s easy and costs a fraction — literally 80% cheaper. In my hometown, a PO Box costs $134 per year. That’s 16% the cost of a typical Regus “virtual office.”
2. A Private Office
Don’t get me wrong — a leased, private office can solve a TON of problems. Especially if you’re on the phone a lot. I leased an office for a year and loved it.
But for the first two-and-a-half years of my startup, my laptop was my office. I worked from cowork spaces, from the Starbucks down the road, from my tiny desk in the corner of my bedroom.
Sure, it was annoying to lug my stuff from place to place. But nowhere near annoying enough to warrant a $600 per month solution. If anything, it forced me to be lean and find ways to stay lean and paperless — like this app.
When you’re just starting out, $600 extra per month on a marketing or product development budget can go a long way — much further than a little private office can take you.
That said, I do think a low-cost cowork space membership may be worthwhile. If you can find a cowork space within 10 minutes of your home (walking of driving) offering desktops for less than $150 per month, give it a try.
But ultimately, make it a goal to work from home. Rather than spend $600/month on an office, pivot that into your personal housing budget and buy or rent a place with an extra bedroom or private office. It’s worth it.
3. Tech You Don’t Need
Maybe this is too obvious. No one — startup founder or not — should buy unnecessary gadgets and software subscriptions.
But if you’ve just finished raising capital and have an extra zero at the end of your bank account, it might seem like buying the newest MacBook, Pixel phone, or smartwatch is a drop in the bucket, and potentially even a good investment. Shouldn’t founders be up on all the newest tech? How can you know what’s out there if you’re not using cutting-edge technology?
I love tech, and I get the “first adopter” allure. But the fact is, your two-year-old laptop isn’t old tech, and unless you’re building an app, you don’t need one of each kind of phone.
Take an honest stock of how you’re using your technology day-in and day-out. If you’re just sending emails and writing documents, your three year-old MacBook is fine. If you’re analyzing data with Microsoft Excel, your three year-old MacBook is fine. If you’re using Quickbooks or other browser-based tools to quote and invoice customers, your three year-old MacBook is fine.
Heck, if you’re building the next Facebook and on your way to billionaire-status…your three year-old MacBook is probably fine.
4. An Industry Certification
Ok, there are definitely some exceptions here.
If you’re starting a veterinary clinic, law office, or counseling center, you sure as hell better be licensed.
But most other industry certifications are a waste of time and money.
And the fact is, few clients are going to care that you have some obscure stamp on your website. What matters is whether you can do high-quality work, and client testimonials go a lot further than a three-letter acronym you pay $400 per year to stick on the bottom of your business card.
ABC, XYZ, American Association of [fill in the blank] — once your LinkedIn title changes to “Founder,” you’ll start getting messages from these obscure, acronym-ized industry associations around the world pitching you the benefits of an annual membership and asking you to join for a few hundred dollars per year.
99.9% of them are a scam. Like the IIPMR certification I pursued for a few months back in 2016.
So take that $400 and invest it elsewhere — a good bookkeeper, Google Ads, a skilled sub-contractor. Don’t mail it to an industry association that won’t ever send you a single client.
5. A Start-from-scratch, Custom-built Website
I’m sorry — it’s 2019. If you don’t know how to set up a basic landing page and collect leads’ contact information, you probably don’t know what you’re doing in other areas, either.
If that’s too difficult, then hire someone to set it up once then show you how to maintain it — how to collect and organize inbound leads, make changes to the website copy, and add or delete images.
Don’t hire someone to build an entirely custom website and manage “upkeep” every month.
I spent way too much time in my first few months of business obsessed with my website. Maybe I was trying to compensate for the fact that, no, I didn’t really have “a business” — it was just me and a laptop. No employees, no office, no nothing. But there is really no reason to hide that. And there’s certainly no reason to spend an arm and a leg trying to impress people who shouldn’t care about appearances, anyways. It’s best to just be upfront about who you are and what you’re doing. In fact, consider eschewing even a company name or brand (at first) and just using your name and a website that showcases who you are and what you do.
The exception, of course, is if your product is a web application that needs to be integrated with your website and landing pages. But if this is you, I’m guessing you’re not outsourcing web development, anyways.
Let me know if you’ve had similar experiences, or any other ideas. Founding a business isn’t easy! Sometimes saving just a few hundred dollars a month can make all the difference in the world.