New release brings further improved usability

Published July 21st, 2005 edit replace rm!

I have now updated various minor usability issues throughout the site. Thanks for your feedback.

Main change now is that the “Edit Web Services” page has been simplified in some respects and made a bit more logical.

Before it was organized with Web services by the fairly geekish “Asset Type”, which I realise was confusing.

Now it is organized by web service instead. The concept of “Asset Type” is way to geekish to take such prominent part in the gui (See my article The Snowblind Solopreneur). This will now be part of a whole new developers area.

Now when you use the bookmarklet it does not ask you for the user name or password (or web service id) to start with.

Now you enter it (and change it) via the before mentioned “Edit webservices” screen. If a web service requires authentication it will ask you for it.

On a much lower level (and more technical level) authentication data is now associated with the web service and not with the asset. This solves a concern I had about possible future security issues. I needed this solve before letting people plug there own web services into it, which will now finally make it into the next release.

First release of my EzCrypto library for Ruby

Published July 20th, 2005 edit replace rm!

I have written about it here in my other blog First release of EzCrypto library.

In upcoming release I will be adding support for digital signatures and rails integration.

Bootstrap globally

Published July 18th, 2005 edit replace rm!

Nowadays businesses are moving all over the world to be flexible and cut costs. I am guessing that many small startups don’t think about this step.

Chances are that you have had a fairly successfull career or a series of jobs, that have required that you live and work in a high cost area such as London, Boston, Bay area, Denmark etc. If you are Funding via a 9 to 5 you need to of course be where your cashflow requires you to be.

I have often heard.. if you want to get funded you need to be within an hours drive of your VC. Well if youre bootstrapping this is not really a problem.

Sometimes you can save money by just going to another part of the country. However for many of us it’s more practical and more fun going to another country.

Why be mobile?

However if you already are cashflow positive, living of savings or angel money or ar able to convert more and more of your work to offsite work you may be able to take advantage of cutting your burn rate and enjoy yourself seeing the world at the same time.

I’ll give an super simplified example. Lets say that all your monthly non business living expenses such as rent, food, phone, insurance, cable, adsl etc where you live right now are about $3000pm, your hosting costs $100pm and your super fancy web service backpocket.com sells for $10pm.

To break even you need to have (3000+100)/10=310 paying clients.

Lets say you could bring your monthly costs down to nearly a third say $1200pm. You still have your monthly hosting costs, but the break even calculation now says (1200+100)/10=130 paying clients.

You could also last a lot longer burning through savings. Imagine if you had saved $10000 up. You could keep going for 7 months without any revenue as opposed to roughly 3 months in your expensive city.

You might also be able to get away with working fewer hours on other peoples projects if you are doing outside consulting, thus being able to focus more time on yourself.

I know all of this is pretty basic maths, but I keep seeing people bootstrapping in expensive places where sometimes it’s actually better for your business to go elsewhere.

Is this for ever?

Maybe, but probably not. Maybe you will end up falling in love with someone there (I did) or you just really like where you have moved to. But really the core idea here is to just build your business up in a low cost area. Then you can always reevaluate later what you want to do.

Sometimes the legal hassle involved with immigration and red tape can be prohibitive for settling on a more permanent stage. For now just enjoy it and save the money.

Where?

There are many places in this world that are way cheaper than the places where many of us hightech types live. I myself have been bootstrapping most recently in Panama, where you as a single person can live comfortably for $1000pm, less if you are prepared to tighten your belt a bit.

Many North American go to Panama, Costa Rica, Chile or Argentina to startup due to low living costs and fun living.

If youre doing it solo or with a friend you can easily go to places like Panama during your startup phase. As an extra bonus you will get to work on your tan and salsa dancing skills as well.

For people from the European Union, there are loads of great cheap wired places that you might not have thought about. Due to the EU principal of free labor mobility you can move to any EU country with very little hassle. In northern Europe, Estonia is a good choice (Skype thinks so too). But I hear that Latvia and Lithuania are great as well. These countries have better infrastructure (think Wifi everywhere) than just about anywhere else in Europe and are incredibly cheap to boot. I am guessing you could get a long on $1000-1500 in Estonia monthly, but don’t have any real experience to back it up with.

Eastern Europe generally offers many cool cities to live/work in that are incredibly cheap.

I know that there are also many people who go hang out writing code and starting businesses in Thailand and other places in South East Asia.

Planning?

Pick your place and remember that you are doing it to save money. Neither Cayman Islands, London nor Bermuda will save you a dime. Questions you need to ask through google or expat mailing lists are:

  • How long is a tourist visa good for?
  • How much do expats need to live? People survive in Panama for $250pm, but expats generally need considerably more.
  • Can you easily get highspeed internet as a foreigner?

If you are just starting up and keep a low profile you can in most parts of the world get away with just a tourist visa. If this needs to be renewed every month, it’s not worth it. Many places will give you a 3 or 6 month tourist visa on entry. You will then need to either extend (lots of red tape) or do a visa run (long weekend in a neighboring country) which may or may not be expensive.

With the example of Panama, if you buy purely US brands in the supermarket you will end up paying dearly. Local brands are available for most products and groceries at a fraction of the imported brands. For example in Panama a US brand yogurt will probably cost you $1.50 while a local one $0.50. Search for supermarket web sites for the country where you’re going such as this Rimith, that will give you a pretty good idea of grocery costs.

Assuming you are developing a great new web service you need an apartment with high speed internet. Some places like Estonia this is readily available, but more likely you need to be able to have it installed in your apartment. This may or may not be a painful experience. Check on mailing lists for peoples real experiences with companies. For example see my experiences with inter.net in Panama.

You will more than likely need a furnished apartment. Many expats with nice apartments often advertise for room mates on the expat mailing lists, these generally already have internet etc. If you prefer living solo you can often find cheap furnished apartments when you get there.

Doing it

If you are paying rent back home there is probably not much reason to do this, so give your notice to your apartment and throw as much of your junk out as you can. Store the rest in a self storage place or in a friends basement.

Buy your plane ticket. Try to get something flexible if possible. It is definitely worth while paying a bit more for a ticket that will allow you to change it. Some fare classes only allow you to be in your country of choice for 90 days, where others allow you to extend it to up to a year.

Book a hotel for a couple of days. It is often easier to find cheap hotels when you are on the ground. Then focus on finding an apartment. There are always agencies you can use, but they are often expensive. If you know the local lingo check the papers.

The Visa run

If you need to leave the country every 90 days for visa reasons, you normally take the bus or plane to the closest neighbor. From Panama most expats go to Costa Rica or Colombia (much more fun than you might think). Again ask on the expat mailing lists.

Staying in focus

Remember you are not on holiday. It is OK to go to the beach everynow and again, but you are there to work on your projects. Most roaming entrepreneurs don’t have problems doing this, but some do.

Don’t burn your bridges

I’m talking from experience here. If you are bootstrapping without a job in a place like London or Boston, you can likely get a job again quickly if things don’t quite go as planned. This might be more difficult if you are in the other part of the world. Specifically don’t think you can necessarily get a job as a foreigner in Panama, Estonia or elsewhere. There maybe work permit issues, the salary may be way to low.

Basically unless you can work remotely and maintain a good network back home, don’t wait until you have no more money in your bank account, keep that return ticket ready and whatever money you might need until you receive your first paycheck. You can always come back again, once you’ve built up funds back home.

Don’t be naive

Only plan on settling down in your chosen low cost destination when you know your way around. Expect that you will probably need to leave again in a while. If you need to grow and hire other people as well as have an actual office, that may only be possible in a place where it is easy to hire qualified staff.

Never underestimate red tape

Don’t bother becoming a local business until you really need to. The red tape involved can be painful and expensive. Many people just continue on their business using the same structures as at home. See my Legal structures for bootstrappers for more information. Basically make choices on what is best for growing your business. Some times it is cheaper and easier to have a US LLC than a Cool offshore company registered in Panama.

Do your banking back home (for now)

There is way to much red tape involved in opening up bank accounts for foreigners in most countries. It’s often easier to keep your accounts back home. Remember to tell them that you are going. Many US banks have a nasty habit of freezing clients credit and debit cards when used abroad. Let them know ahead of time and have a non 800 number for your bank handy in case it does happen.

If you decide to settle more permanently then you can start opening cool offshore bank accounts.

Don’t do this for tax reasons

Seriously do it to save money for your business and not for protecting some currently non existant future $20 million fortune.

If your costs are already low at home stay put

If you already have a nice low cost work environment at home, stay put. There is no need to even consider this.

If there is interest I will follow up with bootstrappers guides for Panama and a few other places. If you want to write one for your favorite place I’m happy to have you guest blog it or I will link to it from here.

For more about Panama have a look at my PanamaFAQ and the Panama category on Neubia.com.

Selling talk.org, tiqt.com and other domains to help fund my businesses

Published July 14th, 2005 edit replace rm!

Like many other geeks I have had a collection of domain names that I have built up over the years. Inspired by Punditpreneur it struck me that I might be able to sell some of them off to help put me in a position, where I can move away from Funding through my 9 to 5 and spend more time on StakeItOut and SoapBX. It really is draining working essentially two full-time jobs and I would dearly like to be able to put all my focus in one place.

Talk.org

So I have a small collection of domain names, that I think would be useful for some people. The real big one is Talk.org, where I have had my other blog going for a few years.

I’m not sure how I managed to pick up talk.org, but the plan was to build an online discussion forum community like I previously had done with TravelTalk. However everyone else started doing this as well and financial and crypto apps started becoming more interesting to me.

About pricing. I ordered Sedo.com’s domain appraisal service, which valued it at €10,000 or roughly $12,000. We’ll see how realistic that is, but judging by DNJournal’s Domain Sale Report more might be realistic. I am definitely not in need of a quick sale so I’ve set it for sale for $20,000 or highest offer. I may accept a small part of this as stock if the project sounds cool, but remember my main motivation is food, housing, server hosting etc. as I am bootstrapping myself. If you can think of something else such as a leasing or partnership scheme I’m all ears.

Tiqt.com

Tiqt.com (pronounced Ticket) was a project that I created last year as part of the Neuclear project. Basically it was a way to create single use “prepaid” cards that could be sent via email or printed out in an internet cafe. As the NeuClear projects are on hold for the next year or so, I might be interested in selling this if someone is interested. I personally love the domain name and will only sell it if it is a decent price, or I will start something up on it again in a years time. I’ve listed it at $3000, the same rules govern as above with regards to structuring.

caribweb.com, javacrypto.com, javasecure.org and pkyp.org

PKYP.org (Public Key Yellow Pages) was also part of the NeuClear infrastructure. CaribWeb was around 1996 a fairly large Caribbean travel site that I put together and was actually making money on. I sold off one part of it and ended up focusing on travel discussions with traveltalk.com. javacrypto.com and javasecure.org where planned as portals for their respective subject areas. However I never had time to get around to it. Caribweb could possibly be brought back to life in a successful way so I’m selling that for $2000 on the same terms as above. The others give me an offer, you wont offend. I might even exchange them entirely for stock if you have a good idea.

These are the links to sedo.com’s sales pages for them:

You are also more than welcome to write me personally at [email protected].

BAP #7 Searching for the team

Published July 7th, 2005 edit replace rm!

You’ve all heard the common advice that to startups that you need a good team. I’m sure that is right, however some times and at certain stages that team should consist of just you.

Granted if you happen to have a really good small founding team of really capable people, by all means you should work together. However, don’t go searching for your team unless you have a specific requirement.

Over on Allen’s Blog there is a interesting article
Some Tough Questions You Should Ask about picking the “team”. Go read the full story, but here is the gist of it:

Founders are also “expensive� in terms of equity (usually, and sometimes even rightfully, to reward them for taking the risk in joining a startup). Founders are harder than normal employees to transition out of the Company (not legally, just emotionally: “How can we fire Joe? He’s a founder.) Just like most people (including VC’s), founders usually have skills and experiences that are narrower than they, themselves, believe (even sincerely). And finally, founders don’t always pick their co-founders with a beady, cold-eyed, highly calculating gaze with a tough-minded focus on who can actually make the biggest contribution to the Company. Often, co-founders are picked because they are friends, or like-minded, or “great people, the kind you’d pick if you were in a foxhole under fire�.

He talks about how VC’s analyze the team. This also applies to us bootstrappers and it is certainly a kind of uncommon wisdom that we should heed.

My take on it is stay solo or tiny where each party has a clear role and clear talent to fulfill this role. When you actually feel a specific need that you can’t fulfill in your existing team (or by your self) bring partners in one by one to fullfill the necessary tasks. See for example 6 simple rules for micro ventures for more information on when you should bring further partners in.

About me

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My name is Pelle Braendgaard. Pronounce it like Pelé the footballer (no relation). CEO of Notabene where we are building FATF Crypto Travel Rule compliance software.

Most new articles by me are posted on our blog about Crypto markets, regulation and compliance

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