Jason Calacanis has a great list on some easy tips for start-ups to save costs. I agree with most of the points. In fact, we followed basically the same rules at SelectMinds in New York, and at Mondus in Istanbul. In Istanbul the list varies a bit and it’s difficult to cut some corners.
For convenience, here’s Jason’s full list below. The post is worth a visit since there are more good tips in the comments.
- Buy Macintosh computers, save money on an IT department
- Buy
second monitors for everyone, they will save at least 30 minutes a day,
which is 100 hours a year… which is at least $2,000 a year…. which
is $6,000 over three years. A second monitor cost $300-500 depending on
which one you get. That means you’re getting 10-20x return on your
investment… and you’ve got a happy team member.- Buy
everyone lunch four days a week and establish a no-meetings policy.
Going out for food or ording in takes at least 20-60 minutes more than
walking up to the buffet and eating. If you do meetings over lunch you
also save that time. So, 30 minutes a day across say four days a week
is two hours a week… which is 100 hours a year. You get the idea.- Buy cheap tables and expensive chairs.
Tables are a complete rip off. We buy stainless steel restaurant tables
that are $100 and $600 Areon chairs. Total cost per workstation? $700.
Compare that to buying a $500-$1,500 cube/designer workstation. The
chair is the only thing that matters… invest in it.- Don’t
buy a phone system. No one will use it. No one at Mahalo has a desk
phone except the admin folks. Everyone else is on IRC, chat, and their
cell phone. Everyone has a cell phone, folks would rather get calls on
it, and 99% of communication is NOT on the phone. Savings? At least
$500 a year per person… 50 people over three years? $75-100k- Rent
out your extra space. Many folks have extra space in their office. If
you rent 5-10 desks for $500 each you can cut your burn $2,500 to
$5,000 a month, or $30-60,000 a year. That’s big money.- Outsource accounting and HR—such a no brainer.
- Don’t buy everyone Microsoft Office–it’s too much money. Put Office on three or four common computers and use Google Docs.
- Use Google hosted email. $50 or free per user…. how can you beat that?!?! Why screw with an exchange server!?!?
- Buy
your hardest working folks computers for home. If you have folks who
are willing to work an extra hour a day a week you should get them a
computer for home. Once you get to three hours of work a week from home
you’re at 150 hours a year and that’s a no brainer. Invest in equipment
*if* the person is a workaholic.- Fire people who
are not workaholics.don’t love their work… come on folks, this is startup life,it’s not a game. don’t work at a startup if you’re not into it–go work at the post office or stabucks if you’re not into ityou want balance in your life. For realz.- Get
an expensive, automatic espresso machine at the office. Going to
starbucks twice a day cost $4 each time, but more importantly it costs
20 minutes. Buy a $3-5,000 Jura industrial,
get the good beans, and supply the coffee room with soy, low fat, etc.
50 people making one trip a day is 20 hours of wasted time for the
company, and $150 in coffee costs for the employees. Makes no sense.- Stock the fridge with sodas—same drill as above.
- Allow
folks to work off hours. Commuting sucks and is a waste of time for
everyone. Let folks start at 6am or 11am and you’ll cut their commute
in half (at least in LA).- Go to each of your vendors
every 6-9 months and ask for 10-30% off. If half of them say yes you’ll
save 5-15% on fixed costs. People will give you a discount if they
think they are going to lose the business.- Don’t waste money on recruiters. Get inside of linkedin and Facebook and start looking for people–it works better anyway.
- Really
think about if you need that $15,000 a month PR firm. Perhaps you can
get a PR consultant to work on 2-3 projects a year for $10-15k each and
save 75%. More PR firms are wasted half the year while you build up
your product anyway.
…- 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!
This is great. Could you share as a post or comment what differences you followed in Istanbul? I’d be very curious to hear interesting anecdotes there.
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