Limited Resources

How do you cope as an entrepreneur if you have only limited resources? Can you be creative and innovative to bend around the system? Our resident contributor, Cobalt Paladin, a real-life entrepreneur relates his tale about dealing with the scarcity of resources and how to overcome that. In the end, he will tell you the most important lesson that an entrepreneur should learn.

Contributed by Cobalt Paladin

In the beginning, when I started, somehow instinctively I knew I had to conserve my limited resources – namely cash. I started my venture at the tail-end of the dotcom boom, when every startups you can imagine were writing business plans and pitching their ideas to venture capitalists (VCs) to get funded. Me, I thought small. I didn’t have a business plan and didn’t look for funding. Maybe because I didn’t think my business was ‘sexy’ enough for the VCs to want to fund me. Mabye I wanted to have total absolute control of my own destiny and I wanted to run the business my way and only my way. So I tried to make use of my available funds as efficiently as possible.

To cut expenditures, there are two areas: business-side and personal expenses. Actually, when you are an entrepreneur, the two areas are non-distinct and usually blurred.

I bought my first laptop as I needed to do presentations. It was from a local brand Digitek and it was a running on a Celeron chip. It was $2500 when I bough it 6 years ago but the price was decent considering the specifications… then.

During those times, Singapore web hosting companies were charging a higher rate than US companies. I didn’t need a dedicated server, I didn’t need co-location hosting plan, I just went for a normal hosting in a web farm. It was only US$9.99 per month as compared to S$1000 per month for dedicated hosting or co-location plans. I wanted servers that is running on Linux, Apache, MySQL and Perl (PHP just picking up then) but most servers in Singapore were running on Windows. I was thinking that in future if I were to run my own servers, I had better run open-source to keep my costs low. It was a fortunate decision because I run 5 dedicated servers now. I shudder to think the licensing fees for Windows servers and MS-SQL softwares. One of my competitors then was using a dedicated server which they proudly announced in their website, the specs would look archaic now but I was really wondering at that time, did they really need a dedicated server? Did they have enough visitors to warrant that decision? A S$1000 per month vs my US$9.99 web hosting plan. If we have the same financial resources, they are like having a burn rate of 50 times mine!

To design my own website, I picked up HTML myself. I was what was termed a hand-coder. To save money, I didn’t hire a web-designer, I typed every single line of codes. I didn’t even use softwares like Fontpage or Dreamweaver. I was using 1st Page 2000 because it was free.

When meeting clients, I would usually take only MRT or bus. Even though during the dotcom boom era, it was hip to dress-down but I was still wearing my long pants and long-sleeve shirt with a tie. I thought it was only right and respectful to the clients I’m meeting. If the bus did not stop right outside the client’s building, I’ll carry my 3kg laptop under the hot blazing Singapore sun and walk to the destination, reaching there 15 minutes before time so that I’ve enough time to cool down and dry-up. Once, I had walked from one end of Chinatown (1st meeting) then Raffles City (2nd meeting) then Ngee Ann City (final meeting). Yes, walked.

Drinks would usually be the cheapest bottle of mineral water (unchilled, because it is cheaper) on promotion. Lunch, either skipped or few slices of bread.

I was fortunate to have a friend who was willing to let me share his office for free. I seldom go into the office but it was still very gracious of him. Unlike now, when broadband and Wifi hotspots is ubiquitous, my Internet connection was the 56kbps dialed-up and Starhub’s Surf-for-free plan. Every morning, I would hear the familiar chimes of the dial-up modem making connection to the virtual world to download my e-mails. I’ll disconnect the link once all my emails are retrieved to save on my dial-up phone bills. Now, it is broadband which I never switch off.

At home, I’ll switch off all appliances that is not in use. Not even on stand-by. The boiled water will be transferred to a thermal flask instead of using the hotpot for hot water. When I’m working at home, not matter how hot the days are, I’ve never switched on the air-con. In the evening, when I bathe, I don’t switch on the lights in the bathroom. I’ll depend on the setting rays of the sun for illumination. I also don’t turn on the heater for bathing. I’ll rely on the warmth of the water which the pipes that carry them has been sunned for the whole day. All these were done to save on the electricity bills.

I scrimped in every possible way. I didn’t know how much resources I’ll need and how long I need to persevere before stable revenue would start streaming in. I just knew I had to save as much as I can. Even so, after 3 years, my funds were at a dangerously low level before business started flowing in. Imagine, if I didn’t save, I may not have lasted to see the results.

Now, I know the proper term for what I was doing – Bootstrapping.

Editor’s Note: This article is republished from Cobalt Paladin’s blog.

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