Bootstrapping Your Business On a Budget

This is a guest post from Aaron Porter, a long-time Twilio developer and founder of MyPhoneTap.com, a service that makes it easy for you to record phone calls.  Aaron was able to launch his business quickly and cheaply, and in this post he’ll share some of the tactics he used to keep costs down while he validates his business model.

How I launched MyPhoneTap.com for under $30

I wanted to provide a service that was fairly unique, I don’t enjoy doing things that have already been done. I had been working with Twilio for quite a while and knew that I could get something useful up quickly based on their services. One of their features is the ability to record phone calls without requiring anything from the end user. A quick search revealed that there wasn’t a lot of competetion in that area and I could beat their best prices.

What does it really take to launch a web based business? Here’s what I consider the bare minimum:

• Domain Name
• Email Service
• Web Hosting
• Payment Processor
• Web Site
• Marketing

Domain Name – $7.69

Once you’ve got a concept for your business you need to come up with a domain name. Good domain names are tough to come by! It will probably take a lot of searching before you find one you like that hasn’t already been registered by a cyber-squatter. It took me a few hours to find MyPhoneTap.com. I registered it with GoDaddy for $7.69 instead of their current rate of $11.44. GoDaddy has a service called Total DNS that provides customizable DNS services for free when you register your domain name through them.

Email Service – $0.00

I’ve been maintaining mail servers long enough to know that I don’t want to be doing it anymore. Call me crazy but I don’t enjoy getting a text message at 3:00 A.M. telling me that the mail server is down and I need to fix it.

There are several free webmail providers but in my opinion ilovefluffybunnies123@yahoo.com isn’t an acceptable email address for a business. Believe it or not you can get free email service from Google for your domain. Google Apps Standard Edition allows you to create up to 50 email addresses with a 7GB limit per mailbox. After you create an account you’ll need to update your DNS settings to start receiving email.

Web Hosting – $0.00

The web never sleeps so your website needs to be up 24-7. If your email server is down for a few hours email addressed to you will eventually get to you. If your site is down you may lose a potential customer forever. I’ve managed on-site dedicated servers, co-located servers, shared hosting, and virtual private servers. For MyPhoneTap.com I decided to go with Google App Engine.

Initially, hosting on App Engine is free. Google estimates you can serve about 5 million pages a month for free after which you’ll need to pay reasonable rates for hosting with them. Free is great but in my opinion their high availability and scalability are more important than the price. App Engine imposes a lot of restrictions on what you can do but it’s for good reasons. When you design your web application to run on App Engine it will automatically scale to meet demand. This wouldn’t be possible without the restrictions. Sleeping peacefully at night because you’re not worrying about infrastructure is priceless!

Payment Processor – $0.00

There are lots of options for payment processors. I went with PayPal because I already had a merchant account with them and knew how to get set up with them quickly. Signing up for their Website Payments Standard account is free. I know can get a better rate for transactions that are under $10 throughAmazon’s Flexible Payments Service. FPS is also free to sign up for, but I wasn’t as familiar with it so it would take me longer to implement. I’ll probably add it as a payment option later.

Web Site – $20.00

With 15 years of web development experience under my belt, the site development cost only consists of my time. Right now I’ve spent around 40-50 hours to get everything working and looking decent.

If you aren’t a web developer you’ve got a few options.

1. You can use a content management system like WordPress or Joomla, both of which are available for free. There are also lots of templates available for free for either one to customize the look of the site.
2. You could hire a team to create the site for you. The team should consist of at least a web developer and a designer. I haven’t met many people who can develop a good backend and also create a visually appealing front end. Shop around and you should be able to find a good hourly rate. My one suggestion is to make sure you know what you want the site to do and that you can explain it effectively before hiring anyone.
3. Your third option is to sit down in front of the computer and learn how to develop web applications. There are many good resources available for free on the internet to learn HTML, JavaScript, Java, Python, Ruby, PHP, or probably any language you can think of. It may eat into your FarmVille time but I think it’s a good tradeoff.

I used these free tools to create this site:

• Eclipse – a programming IDE that makes my life easier
• Stripes Framework – makes web development in Java fun
• Objectify – an interface to the Google App Engine datastore
• jQuery – a great library that makes working with JavaScript painless
• Gimp – graphics manipulation
• CSS3 PIE – adds CSS3 decorations to Internet Explorer 6-8

The photos on the site all came from Stock.XCHNG. As of this writing they have 394,817 graphics available for for free. Some of the images do have usage restrictions so make sure you read the details.

I do want to hire a web designer eventually to make it look nicer. That will add to my cost but for now I can live with the current design. You can find free designs on the internet or you can find good prices at sites like TemplateMonster.com.

Where does the $20 come in? I’m using Twilio to provide telephony services and the $20 went to fund my account. You can sign up for a free account to try out their system but eventually you’ll need to pay for your usage. Hopefully I’ll get some business and have to spend a lot more with them.

Marketing – $0.00 (so far)

At first I’m hoping to get a few visitors via word of mouth and through social networking sites. I don’t want too much traffic at first because I want to get the bugs worked out (there are ALWAYS bugs). Eventually I may add some pay-per-click advertising but we’ll have to wait and see.

Total: $27.69

(And LOTS of elbow grease!)

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Thanks Aaron!  If you’ve built a business with Twilio and have ideas to share with the entrepreneurs and developers within our community about getting your product to market, please drop a note to danielle@twilio.com – we’d love to feature you on our blog!