"How to Build an Enterprise Web App on a Budget".
This was a great talk and made my top spot on the feedback. No-one ever talks about this kind of detail in the frank was that Ryan did.
Why build?
You don't have to be big anymore. Web applications are much more acceptable to people than they were a few years ago. Combine this with the plummeting cost of hardware and availability of Open Source software and OS.
Enterprise
Ryan defines enterprise as mass market or 1,000+ users.
The Budget
He says that the minimum cost for an enterprise web app is £30,000. you should make sure that the idea is financially viable ie that it is worth paying for. use your common sense - would you pay for it? be cautious about your projections - get a pessimistic guess and then cut by 45%. Are you still in business? Then go ahead, oh, and make sure you plann for profit from the start.
DropSend is a hardware intensive application so some of the following figures would need adjusting for other apps.
| Item | Cost |
|---|---|
| Branding and UI design | Ryan Shelton Mutado.com £5,000 |
| Development | Plum Digital Media £8,500 + equity |
| Desktop Apps | £2,750 |
| XHTML/CSS | £1,600 |
| Hardware | Old Linux box for dev testing £500 |
| Hosting and maintenance | 5 Servers from BitPusher £800 pcm |
| Legal | £2,630 |
| Accounting | £500 |
| Linux Specialist | £500 |
| Misc | £1,950 |
| Trademark | £250 |
| Merchant Account | Halifax £200 |
| Payment Processor | Secure Trading £500 |
| Total | £25,680 |
And that only includes one month of hosting.
To help with raising this capital Ryan ran a side business - Carson Workshops - but it still took a year to raise the necessary.
Building a team on a budget
Go for quiet talent rather than rock-stars. Big names cost and are generally busy busy.
Offer a percentage of product equity (2-5%) which becomes bankable if the product is aquired.
Ask for recommendations - getting the wrong person can be disasterous. or you can always outsource - Ryan tried India but it didn't work out for him, largely due to the distances involved.
Scalability
Buy just enough hardware to launch, but build your app so it easily scales - can you easily plug in disk space? Don't get tempted by lots of shiny new servers.
Plan for scalability but don't obsess about it.
Keeping it cheap
Don't spend money unless you have to:
- no stationary (DropSend wasted ٟ,000 on this!)
- no new shiny machines - they built DropSend on a aging beige pc.
- no luxuries
- no features beyond the bare minimum - don't be tempted to say "what if we did this". You can add more features later, anything else is stopping you from launching and generating profit.
Before you spend anything more than £25, just check yourself and make sure you really need it.
Make deals. Build websites, give away equity, give advertising on your blog.
Use IM, no phone calls.
Do as much yourself as possible:
- wireframing
- marketing
- user testing
- bookkeeping
- copy writing
- get friends to help with user testing
- shop around - the first hosting quote ryan got was for £12,000 pcm!
Pessimism
You will go 10% over budget and 3 months over schedule. Plan for it at the outset and put it in the cash flow. Are you still in business?
Lawyers
Make use of those free 1 hour consultations!
Company terms of service will cost £1,000; contracts for freelancers £800; privacy policy (from Clickdocs) £15.
Cheap Software/hardware
DropSend was developed primarily with cheap/free software from start to finish.
- Project management - BaseCamp
- Bug Tracking - Trac
- Meetings - Skype and AIM
- Version Control - SubVersion
- LAMP
- £200 Linux box for testing.
Marketing
Don't spend money! Use blogs and word of mouth. Look for viral delivery tools - make your app tell other people about your app (eg DropSend sends email notifications and includes info on itself). Write about your app for the trade magazine of your target audience - they will generally be happy to accept it.
Venture Capital
You need a seriously good reason to give away some of your company to v.c.