How To Start A Tech Company With No Money
How do you start a tech company with no money? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Tyler Denk, Co-Founder of VentureStorm, on Quora:
My co-founders and I launched VentureStorm as broke college students with absolutely no money. We’ve gone to incredible lengths to stretch every dollar and be as frugal as possible as a bootstrapped company.
Before you have a product, costumers, or revenue… you don’t need to file to become an LLC or C-Corp or whatever. It costs money to do so, and you’ll end up paying taxes on it as well. Step one is building the product. Being that it is a tech company, it’d be advantageous to either have a technical background yourself, or partner with someone who does.
You don’t need money to build the product. Assuming it’s a software tech company, you can write code and build the foundation of your company at no cost aside from you and/or your partner's time.
Sell Before You Have a Product
This goes hand in hand with building a minimum viable product (MVP). Before dedicating hundreds of hours to build your product, you can sell potential customers on your solution. Contact your target market and pitch them on your idea as if it’s already built. Are people interested in what you are building? If so, don’t hesitate to ask for money. Tell them by purchasing an account now, they will receive a significant discount compared to when it launches.
There are different strategies to approach this. It’s essentially accepting pre-orders for your product. If you do it well, then that kind of moves you out of the ‘starting a tech startup with no money’ situation in the early stages. At the very least it’ll help a good bit and provide some flexibility and validation.
Whether you need talent to initially build your product, or additional talent as you begin to grow your team and scale, there are plenty of options available. To find co-founders you could attend meet-up events or leverage your network for those with the skills you need. Without having money, outsourcing probably isn’t your best option. In my opinion, if you’re building a tech startup I don’t think you should outsource in general.
Quick shameless plug here (sorry), but some colleagues and I built VentureStorm to solve this exact problem and assist others in this situation. We allow entrepreneurs and startups to seamlessly connect with talented developers interested in working with startups. It’s not uncommon to see many transactions to be primarily equity based for co-founder positions - so there are options available to source talent without money.
Most people think building the product is the hardest part… it’s not. Once you have a finished product you are really just getting started. Now the name of the game is getting people to know who you are and what you do. Many startups who raised millions pre-launch are typically spoiled and will immediately pour thousands into ad campaigns.
Having no money puts you at a disadvantage in some respect, but will teach you how to guerrilla market and grow your audience organically. My team and I have utilized the grittiest techniques to reach our users, and have sort of become “experts” at growing our user base without spending money.
- Find where your target market hangs out online and assimilate yourself into those communities.
- Facebook groups.
- Slack Channels.
- Subreddits on Reddit.
- Specific topics on Quora.
- Websites/platforms specific to your target market.
- Launch your product on sites that are free to use and could result in a ton of publicity or user growth.
- Product Hunt.
- Attend meetup events that involve your target market and make personal connections.
- Form mutually beneficial partnerships with companies and organizations.
Don’t Avoid Opportunities For Money
There is actually a ton of money available out there… for free in many instances. When we launched VentureStorm while in college, we received a decent amount of equity-free grant money for applying to different grants and winning pitch competitions. Most universities have similar opportunities.
Outside of college campuses, there is grant money available from a ton of organizations. There are plenty of pitch competitions available nation-wide and locally. Depending on how entrepreneurial you’re feeling, you could always do something like drive for Uber on the weekends to source money for your startup venture.
We were fortunate to secure some grant money (although not much), which helped us sustain the company in times when growth was slow. However, we have maintained operating the company at a very very low cost due to many of the techniques described above.