How to start a business with zero capital

There’s a great story about the folks that started Groupon in The Lean Startup.


Incredibly, these guys put probably the world’s scrappiest product on the market, by building a site on WordPress, managing contacts with Filemaker and sending out the first Groupons in PDF format. I loved that last part when I read it…PDFs!

Their objective was to grow a demand for the kooky concept they had cooked up, “group coupons.” Which makes a tremendous amount of sense — you can’t offer group discounts if you don’t have a user base. 

Most critically, they didn’t wait until they could hire a hotshot designer. They didn’t freak out about not having the awesomest gewgaws on their site. They set to work building a platform for the business they wanted to build — and by taking this approach, they were hugely successful.

The growth of the social web, along with an unexpected tech boom in the face of a terrible economy, has meant a lot more people are entertaining the idea of starting their own startup. I talk to a lot of them about what they are working on and how they should proceed.

Usually, the ideas that I hear about are consumer-facing and contain some spin on an existing social site like Airbnb or Facebook or Netflix.

The problem is that people get really hemmed in by the scope of the technology and infrastructure that’s needed. The backend of Netflix probably involves a pretty well-oiled team of engineers and cost a gagillion dollars. Not really the place for a modest operation to start in their ambitions.

Worse, these would-be entrepreneurs hold their breath and think, “someday my developer will come…” as though they’ll stumble upon a technical cofounder at the grocery store and want to leap into the kind of marriage a business entails.

If your business is aimed at a regular segment of the consumer market, especially if it has  a content or sharing component, I say, why wait? 

You can start that business with zero capital or technical know-how.

How do you do it?

You do as the Groupon guys did, you focus completely on building an audience first.

You say to yourself: what can I offer to people who love dogs/make pottery/want to escape corporate America/want to learn to play music/are interested in Korean cooking/etc. right now?

You look at every angle that’s about building, serving and developing the audience that will support the business that you want to build.

You start a Twitter account. You create and curate content and post it to Pinterest, your blog, Facebook.

At the end of a period of weeks or months, you have an audience, people who will pay for what you want to sell.

It’s a great testing ground not only for audience development, but also to test your own commitment to the idea. You’re the one who has to live with it after all.

So my advice to people with really great ideas is to shorten up the period between dreaming things up (always fun), with testing them in the world (sometimes frustrating, but necessary).

If you want more ideas on testing your ideas, I hope you’ll be sure to sign up for my Upstart U email list. 

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