"The cost of launching a tech venture is continually falling, due to a large number of interrelated technical, social, and financial factors." - The statement couldn't be more true, it's simply becoming easier and less expensive to build and launch a startup compared to 5 years ago, or even last year. It's part of the reason why there are more startups founded in undergraduate universities, business grad schools, and by young entrepreneurs who have small savings, if any, to seed their ideas. At the same time, some of these early stage companies create very viable and attractive investment opportunities for venture capitalists. Earlier this week, I spoke with Bijan Sabet, General Partner at Spark Capital who not only agrees that "students make for great investments", but also invests in those young entrepreneurs. He's led investments in Tumblr, which was started by David Karp when he was 19, and Twitter.
The notion that startups could be started with little startup capital spurred Graham Lawlor (currently studying for his masters at NYU), to found the Ultra Light Startups group. (I was fortunate to meet Graham a short while back at the Web 2.0 conference in New York City. We kept in touch because our common interests and that our two projects have a lot in common.) Graham describes Ultra Light Startups as "a group of entrepreneurs who explore these perpetually evolving factors and refine techniques to launch technology ventures - minimizing cost and time associated with testing ideas in the marketplace." I absolutely love the idea and have given thought to helping him start one in Boston, but I just haven't had time to give it as much attention as I would like.
The startup group meets once a month and hosts on average 30-50 tech entrepreneurs who come to actively share ideas, network, and participate in discussions that focus on a particular "ultra light startup" technique. Last month, they ran one on SEO and SEM. On December 4th, they'll have a panel and forum discussing open source content management systems, such as Drupal, Joomla, and Wordpress, and how you can utilize them for your startup. Part of my job at Acquia is to discuss prospects' web initiatives and how Drupal can help them build their websites, whether its a large media site, social network, or application. I have talked to a large number of startups who are using Drupal not only because it saves them time and money, but because it is a very extensible and powerful open source platform. Open source strategies have proven to be critical underpinnings of some of todays most successful companies...Google leverages OS and many applications on the web are built off PHP, just look at Facebook.
What are the characteristics of an Ultra Light Startup?
* Low permanent headcount, low overhead, low budget
* The use of outsourcing, offshoring and outsourcing marketplaces (e.g. Guru.com, Elance, oDesk)
* Use of off-the-shelf and open source software and platforms (e.g. WordPress, Drupal, Joomla, MediaWiki) and their ecosystems
* Minimizing hardware costs and maximizing flexibility with cloud/network computing
* Leveraging infrastructure and communities provided by the diverse set of existing and social platforms and devices
* Viral/guerilla/social marketing
* Any other low-cost, high-flexibility techniques