WATCH: Tech start-ups explain the technology they use to trim the fat from their budgets, and keep running costs lean
While traditional businesses around the world struggle with their bottom line, hi-tech start-ups are making use of all the latest money-saving tools at their disposal.
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At the recent GeeknRolla event in London, in which start-ups and investors from around the world met to wheel-and-deal, there was an almost evangelical desire to spread the word about how new technology can boost efficiency at any type of company.
“Just five years ago, small businesses wouldn’t have had access to half the tools that are available now on the internet”, says Michael Jackson, an investor from Mangrove Capital.
“Companies that are cottoning on quickly to these tools are doing very well, and they are taking business away from those who are too slow to adapt.”
In particular, Mr Jackson emphasises the importance of cloud computing, which allows a business to outsource the storage and processing of its data – such as email, financial accounts, and customer databases.
Top tip
Entrepreneur Wendy Tan White believes in ‘software as a service’ In fact, when asked to provide a top tip for traditional businesses, cloud computing was the most common answer among GeeknRolla attendees.
“Now you can pretty much get a piece of software online, that you only pay for when you need it,” says Wendy Tan White, founder of startup Moonfruit.com, which builds ready-made websites for small businesses.
“For example, people pay for our service on a monthly basis, which lowers start-up costs, but also makes it easier to shop around and find the best product because you are never tied to one piece of software.”
In addition to being “pay-as-you-go”, cloud computing has the advantage of reducing the number of computers, servers and network connections that a small business needs.
“It’s never been cheaper to start a business,” says Bindi Karia from Microsoft.
“A decade ago you would have had to spend a lot of money on hardware – all those boxes that go in your office. Now you pay someone else to look after those boxes.”
On the move
Of course, no business can thrive without computing power, but that power might as well be generated by a smartphone or tablet rather than a desktop, so workers can be untethered from their desks.
Josh Williams relies on apps to run his business efficiently Mobile devices run their own software, in the form of apps, many of which make use of cloud computing and are well tailored to the needs of small businesses.
“We wouldn’t be able to survive without apps”, says Josh Williams, founder of start-up Gowalla.
“We use a service called JotNot, which lets you take a photo with your camera phone, of receipts or other documents that you need to email. So I don’t have to go to the office to scan something, or waste my assistant’s time.”
“We also use another app called Square, which lets you take credit card payments on your smartphone. It’s really low-cost – around 2.75% per charge – and you don’t have to have a merchant account.”
Lean startup
Startup founder Damian Kimmelman follows the Lean Startup methodology Many GeeknRolla attendees follow a methodology known as Lean Startup, which espouses a very specific model of a small business – one that updates its key product frequently and in response to constant feedback from customers.
Although not a technology per se, the Lean Startup methodology has spread and developed largely through the internet.
The term was coined by blogger Eric Reis and popularised by other influential bloggers, such as venture capitalist Dave McClure.
“It’s about how to cut corners,” says Damian Kimmelman, from start-up Duedil.
“If you start living and breathing that methodology, you find your own ways of working and you get rid of the [unnecessary features] in your product.
“You only focus on the things that are most essential and differentiate you from the competition – instead of trying to do things that companies with bigger budgets can do better than you.”
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