Ian Howlett realised that one laptop wasn’t going to be enough when he started his software company, Publisha. Unfortunately, however, that’s all he had.
In order to get a printer, he convinced a former employer to give him a broken one, which he duly repaired. Then he had a lucky break when a friend gave him a scanner/copier that had never been used. For Howlett, this was enough to get going. ‘You probably don’t need everything you think you need. A mono laser printer is fine and even the most basic laptop today has everything you require to start up.’
The cloud helps start-ups too. ‘We use shared hosting with a company abroad that has a big web server and they give you a small part of it,’ he says. ‘You can scale that up or down really easily if you need to and pay month by month.’
Not all businesses can bootstrap quite so easily. While office essentials can be relatively cheap, Rhydian Lewis, chief executive of money lending company RateSetter, needed a relatively intricate technology to run his web-based service.
‘We looked at some off-the-shelf solutions, but they are incredibly expensive,’ says Lewis. ‘Rather than buy it and having to rewire it [for our own purposes], we decided to build it from the ground up [ourselves],’ he explains.
Still, the technology wasn’t cheap. Lewis set about raising £850,000 from 24 private investors in exchange for 45 per cent of the business. ‘It is not the kind of product that you can just get up and running on a small budget and then raise money,’ he says. ‘We needed substantial investment.’
Outsourcing technology is another option for start-ups. Mark Peatey, director of car leasing operator FinanceACar, went through four different international teams before he settled on a UK one to develop the technology for the company’s car finance comparison engine.
‘We offshored to a team in India to do our beta testing but experienced poor project management,’ says Peatey. ‘After three months of that we sought out another provider in China that was much better organised but misunderstood the brief; then Australia, which was way too expensive, and Eastern Europe, which didn’t even get out of the starting blocks.’
Ironically, Peatey found what he was looking for much closer to home: ‘We ended up with a fantastic outsourced British technology team based in Twickenham.’
It cost £100,000 over a period of 18 months. So although there are cheaper technology options for start-ups, especially through the cloud, it’s clear that when it comes to quality IT, significant investment may be needed to get your business up and running.
