Just a few days ago I got an e-mail from one of my readers asking me some questions that many readers in the past have asked me. So I think the least I can do is to try my best to answer them as well as I can
(Do keep in mind thought that Boss Stewie is after all an entrepreneur that is yet to prove himself so don't take my words as seriously as you would take Michael Dell's words)
Here is the e-mail (I took out his real name as requested)
Dear Boss Stewie,Dear Maniacz,
This is MaN|acZ. Just call me
MaN|acZ or LeeCH.
Anyway, I have some questions to ask you.
1) I'm curious like how do you get yourself paid for
your startup? (I assumed since you have no working
experience, where did you get your money?)
2) How long you expect that you'll be able to gain
back what you've invested?
3) How does a typical life of your work day like? I
actually do have plans to start up my own company. But
I just afraid that I'll run out of money before I can
make it.Please advise.
And my reply
I assume that the 'business' you're planning to start is a dotcom like mine.
Let me try to answer your first question.
The only time I earned money of my own was during my past two summer holidays where I did internships at two different investment banks.
So you can imagine that the money I earned and saved was hardly enough for me to embark on this business.
Therefore, after working out the business plan and deciding on the minimum capital that we needed, we started exploring options of how to save cost or come up with the money.
For example, I met up with a representative from the Multimedia Development Corporation based at Cyberjaya to explore the facilities they provide up-and-coming internet entrepreneurs.
Upon hearing my businesss plan, the representative discussed the kind of help they could possibly provide my little dotcom.
Among the possibilities we discussed was assistance in finding graduating MMU students to work for my little dotcom and on top of that, an offer to subsidize 50% of my labour cost.
We could also use their workstations that come prepared with original licensed software web developers would need that could potentially cost you thousands and thousands of ringgit if you decide to do it on your own.
And of course on top of all this, there is the incentive we all want: a cash grant.
I recently heard of an internet company that not too far back received a RM1.6mn grant from the MSC.
Apart from exploring the possibilities of working together with the MDC, we managed to find some venture capitalists that were keen on investing in our little dotcom.
Now there are two ways of financing your business if personal finance is not enough. You could borrow money from a bank, or find venture capitalists.
The first option is less advisable for internet businesses since most internet businesses (though this depends on your business model) typically won't generate much revenue in the first couple of years so servicing the loan interest every month will probably kill you.)
Besides, banks aren't likely to lend money to internet businesses especially since they don't have much collateral to offer.
The second and more feasible option for internet businesses is to find venture capitalists to take up an equity stake in your business.
Before starting this business, I had 'accidentally' come across a venture capitalist that was interested in negotiating a financial package.
I had also received a call from an old friend in the Middle-East some time back and he too was asking if he could take up a stake in the business.
If you work with venture capitalists, you could probably negotiate a monthly salary for yourself. I've seen real life examples of this happen so they're very possible.
I believe that all these options in finding the right financial package makes the statement of "No Money To Do Business" just an excuse from people who like to talk about doing business but aren't determined enough to actually walk the talk.
Billionaires like Sergey Brin, Richard Branson and Steve Jobs started with no money as well. The difference is that they were determined enough to find money to do business.
As for my partner Ming and I, we are both lucky to have some financial backing from our families (possible partly because the start-up capital for our business is relatively small).
So after exploring these options and keeping our capital to the minimum, we decided that we could at least for now say no for banks and venture capitalists.
Since the first answer has already been long enough, I will answer your second and third question as briefly as I can.
As to how long before I gain back what I've invested, the answer is: Probably in no less than 2 years and possibly even NEVER.
As to how the typical day for an entrepreneur is like, there isn't really a 'typical day' at this stage.
Every day seems to have different challenges and every day my partner and I are given new problems to solve.
Keep in mind that many dotcoms don't make much money at all for the first few years of operation.
So if you're worried about running out of money half way, have a backup plan.
Keep in mind that all the 3 billionaires I mentioned earlier (Richard Branson, Steve Jobs and Sergey Brin) have all at one point of their lives almost lost every penny to their name in order to keep their company going.
I hope I will never have to go through that... but I know I'm just being wishful.