Prateek Dayal

Nithya and I were at XtremeStartups’ Startup Morning in Bangalore on 24th May 2009.  We talked about Muziboo’s early days, our philosophy and our learnings. The discussion was moderated by Indus Khaitan and MVP Team captured the talk on video. Other speakers were Phanindra Sama of Redbus and Himanshu from LifeMojo. Here is the audio from part 1 of the talk where we talk about Muziboo. We start talking only at around 13:00. Before that, you can hear Suryanarayan talk about NSRCEL. Since this was a video capture, the audio quality is not all that great (but you can catch most part).

Muziboo @ XtremeStartups | Music Upload

If you liked this talk, you can subscribe to XtremeStartups’ RSS or iTunes feed  or visit XtremeStartup’s Muziboo page. If you have any feedback/questions on what we spoke, please leave them as comments.

On a related note, I would be very thrilled to see more events/people use Muziboo for sharing podcasts or lectures. We provide RSS/iTunes Feeds/Follow By Email along with detailed stats on usage. Pro Account holders can upload upto 30 MB per file (which is about 1 hour of 64kbps audio file).

Popularity: 5% [?]

I was part of the panel discssion at the  xtremestartups event on Sunday and one of the topics we discussed was funding a startup by consulting on the side. I strongly believe in two things - bootstrapping and working full-time on one’s startup - but there are real costs involved in starting up that one needs to take care of. In case one doesn’t  have enough money saved up, consulting is the only feasible option (other than getting funded). It’s best to avoid even consulting (by running a lean and mean start-up) as it takes one’s focus off the start-up. But most times it is inevitable and I recommend the following tips to make the best out of your consulting stint.

Pick the right projects

Of all the things that I have learnt about consulting, this is the most important one. Here are a few guidelines that can help you pick the right projects.

• Charge by the hour and never opt for fixed budget projects however-much enticing they are. All software projects tend to get delayed. The delays don’t mean much if you are in the consulting business, but if you are trying to raise cash for your startup, every extra day lost  reduces your product development runway. If billing is by the hour, you can make sure that such delays don’t hurt you. It also makes sure that you get only relevant change requests (since the client is paying for every hour spent).
• Pick projects that you like working on and teach you things that can be applied to your own idea. For example, if you are planning to work on an e-commerce portal (or want to add a payment gateway to your existing product), you can pick up a similar project and learn relevant stuff there.
• Don’t mind dirty maintenance jobs as they are short and well-paid. As engineers, we tend to love working from scratch and hate fixing bugs in someone else’s code. End-to-end product development cannot be delivered in a few sittings unlike a well defined back end work. Also you will make big bucks  in projects that are already live, because  your contribution as a subject matter expert  is extremely important for the company in fixing its product.
• On a related note, avoid projects that involve working on the UI. These jobs involve talking to the designer, taking the CEO’s viewpoint on buttons/boxes and cross browser hell. Compare this to backend work, where you can work all by yourself, whenever you want and finish the job much more quickly. You want to avoid any sort of job that has too many stakeholders.

Don’t grow your consulting business

Once you pick up a project, there are inevitably more such project offers coming your way and most often you will be tempted to hire a couple of freshers and a manager and spin off a consulting business - an amazingly self sustained money generating machine of a business that requires minimal effort  that can keep funding your product development. If you go down that Utopian path, before long you would realize that most of your time is spent in business development, following up on payments, motivating your employees and other mundane activities. If product company is what you want to build, do not shift focus. Take up just as much  as you can do than sinking into the quagmire of a services business. The cash reserve that you build should be just enough to give a decent runway for growing your startup.

Get Paid

While this looks like the most obvious one, many people make a mistake here. As engineers, we tend to charge based on our needs and not our skill set and its value in the market. Talk to  few of your peers and figure out how much to charge before you quote. Don’t charge lesser than the market rate and make sure that you get paid. Sometimes, your clients are too busy and paying you may not be the top priority item in their to-do list. Follow up and get paid. If possible, take an advance payment before starting out and decide on milestones for remaining payment.

You can’t always balance it right

One more setback which is not quite obvious on first glance is the time-sink that can happen due to continuous context switching between consulting projects and your start-up idea. Consulting is going to take your focus away for a while and your startup’s growth may suffer because of that. The idea is to accept that upfront and not let it bring you down. The last thing you wanna do is to end up demotivated. If you are working all day on consulting projects, there is no point  forcing yourself to work on your startup at night. There is only so much one can code every day and any spare time should be used to reflect upon your  start-up’s growth and strategy. If you are adventurous, you can also use this break to catch up on your reading or hang out with friends :)

In the end, figure out what works best for you and do it. Idea is to make some money, learn something new and have some fun. When you get back fulltime to your startup, you should be richer and invigorated!

Popularity: 7% [?]

When we started Muziboo two years back, we had no idea how much money was needed to get a company off the ground. Both Nithya and I had our day jobs and we never consciously worked out the finances. We started to think about money only when we went full-time and eventually went broke. Like most people who have no entrepreneurial experience, we only thought of hosting costs (and were wrong there too!). During the course of two years, we have realized that even though its possible to bootstrap a startup cheaply, you need substantially more than $0. Here are some of the costs we have encountered on the way

Hosting & Backup Costs

Depending on how fast your site grows, you will have to get atleast a VPS server and eventually a dedicated server. Shared hosting does not work out most times for anything serious. For a VPS, you can expect to pay around $50 a month and for dedicated hosting, something around $150  a month.  You will also need to invest in backups. We backup all user data (mp3, photos) and database dumps at S3 using s3sync. You can always backup locally on your harddisk but you need to consider how much it will take for you to restore all the data over your DSL connection. You would also wanna signup for a service like pingdom to receive sms alerts if your service goes down.

Apart from hosting and backup costs, you may have to spend on code/ticket hosting. You can always host your own svn/git and trac but its always better to outsource that kind of stuff. When you are starting with a small team (1/2 people), you can expect to pay $5 - $10 a month.  Putting everything together, you can expect to pay around $200 a month on your hosting needs (once you achieve some reasonable scale).  This comes down to about $2400 a year or Rs 120,000. Overall, you can expect to spend around Rs 130K to Rs 140K a year on your hosting related needs.

Chairs & Desks

If you are gonna be working fulltime on your startup, you will have to invest in great chairs and decent desks. You cannot work on a bean bag or your dining table every day as its gonna kill your back. We got two simple desks (Rs 1000 each) and two good chairs (Rs 3500 each). So for two people, expect to pay around Rs 10,000. You may also wanna invest in a whiteboard to make sure you have a place to discuss stuff. A decent sized board would cost around 3k.

Computers & Peripherals

You will need to get two desktops (or two insanely great laptops). I personally find working on laptop for long hours very hard. Depending on what you buy, you will need to spend atleast Rs 25,000 per person. Over time, you may have to buy better monitor or better keyboard (the Rs 500 keyboard sucks if you work 8-10 hours a day). If you are buying desktops, you will need to buy a 1KVA UPS which should cost around 20k. If you are buying laptops, you still need to buy a small UPS (Rs 3500) to power up your modem and router in case of power failure. Total costs for this kind of setup should be atleast 80k.

Legal Costs

You will need to get some legal documents in place. You will need Terms and Conditions and privacy document written up by a lawyer.  Lawyer costs vary a lot so I can’t really talk about any estimates. It depends on what business you are in and how much work the lawyer will have to put in to get your documents ready.  You should still expect to spend atleast Rs 25,000 on this . You will also have to file with the copyright office in US and register a designated agent for DMCA complaints with them . This process costs $80 (one time) and more details can be found here. This is absolutely necessary if you have a site where users are going to put up content. Filing this document makes sure that you can’t be sued without being given a chance to remove the offending content from your server first.

So overall , you will need about 2.6 lakhs in the first year to get your venture off the ground. Since this does not include any salary and office rent, you would need sufficiently more. For a two people startup, working out of a house (Rs 10,000 a month) and living a very basic life (Rs 20,000 a month), you will need 6 lakhs a year. So overall, you need about 9 lakhs worth of investment to get even an internet startup off the ground.

Popularity: 9% [?]

Since I started working on Muziboo, I have been a big fan of release early, release often philosophy. We launched Muziboo one month after getting the idea with very basic functionality and a very simple design. Since then, we have been listening to our users and continuously improving it. However I have to accept that many times in retrospect, I have been embarrassed by what I released. At times, I have also renounced release early release often for a few weeks (in search of design/functionality zen) only to realize later that its a bad idea and that I don’t have much progress to show for those weeks. I recently listened to a Mixergy interview with Eric Ries and started thinking about why we still don’t see that many examples of release early release often and see so many stealth mode startups around us. Here are a few points I think influence people:

A different kind of vacuum

I think everyone agrees that there is nothing worse than building in a vacuum. However I think the second worst thing that you can do is to build with feedback from people that are not your potential users. Most stealth mode startups take feedback from their close friends, family and other people in their network. The problem with this approach is that if someone is not your potential user, he/she is always gonna compare your product with the successful products of the world and not based on ‘that one thing’ that you do really well. You are only gonna get very generic feedback like “design is not that cool” or “you should try to use more ajax and overlay windows”.  In fact its very easy to get wrapped up in refining your product’s interface and delay your launch.

Ideally you should just get the basic functionality right and launch the product. You should not care if a lot of people think  that your product sucks (it does, but thats ok). Get your first few real users and listen to what they say. Solve a small problem first and then grow from there. Sure, you are going to lose some people who are never gonna come back to the site but thats ok. Internet is a large place so won’t run out of users anytime soon and once you have critical mass, most likely they will come back anyway. Find the first set of users who care for the solution that you are offering to them (because it solves one of their pain points) and grow with their feedback. Don’t obsess with UI before launch just because your ex-boss is still not impressed or because that big blogger won’t write about you unless you have a nicer interface (he won’t write about you anway and it does not matter again).

Stealth mode as a marketing technique

Another reason I see a lot of people doing stealth mode startup is to create buzz with the bloggers and potential users. Get over it. Most likely stealth mode strategy won’t create the buzz for you unless you are already very popular. Its just gonna give you too much time to work on stuff that does not matter. Some startups do end up creating some buzz (or curiosity) but in the wrong circle. Your twitter followers and your blog readers will probably get to know that you are working on this next cool thing but thats as far as it goes.  Most likely your target audience will never hear about your stealth mode product and wait for its launch. If people are coming to your site, show them the real thing and not a text box to add their email address to the wait list. Hunch can pull it off but you probably can’t.

Working in stealth mode?

Trying to avoiding rejection (and embarrassment)

More often that not, people are just not comfortable releasing something thats not upto their standard of perfection. They don’t wanna release something they are not extremely proud of on the day of launch. Right from childhood, we are taught to work on our weaknesses and we simply can’t release something that other people can easily point holes at. My advice is that its ok. In my two years of entrepreneurship I have realized that you can’t avoid hearing from some people how your product sucks or you that you have no competitive advantage. You cannot avoid those uncomfortable moments where some people tell you that they would never use your product in the current shape and that it has a long way to go before it gets any where. You cannot avoid that situation by postponing the launch by three more months and working some more on it. As an entrepreneur you have to learn to accept some rejection (atleast early on). You cannot and should not try to please everyone.

In the end most of what I have said is from my personal experience and observation. There are always cases where working in stealth is better and if you have the vision and domain knowledge to pull it off, you should do it. However if you are like most bootstrapped startups, you can benefit a lot from releasing early, talking to your real users and then releasing often with their feedback. As Eric Ries says in the Mixergy interview, understand the difference between your product launch and PR launch.

Popularity: 14% [?]

Everyone agrees that the hardest part for a startup is to get the early set of enthusiastic users. We got our first set of really enthusiastic users and evangelists from Barcamp Bangalore 5th edition (BCB5). They gave us tons of good feedback, blogged about us, turned into passionate users and got more passionate users. Its not very hard to imagine why this happens. The thing about barcamps is that there are geeks there who are willing to listen to you simply because you have created something yourself. They don’t care whether the whole world is using your service yet or not. If you have something cool and can convince them why its great, they are willing to try it out and even talk to other people or blog about it.  They may sometimes get attracted to your service simply because its built in Ruby on Rails (or their favorite framework) :)

However its very hard to travel to different cities or countries to attend such events and demo your startup and talk to the people about what you do. This is where I feel bootstrappers have a disadvantage compared to the well funded companies.  But we can easily fix this problem by having a Barcamper Exchange Program (lets call it that untill we find a better name) where we have a pool of barcampers who are willing to demo your app in their local barcamps. They won’t do it for the money or as a favour but simply because they are in the same boat and know how hard it is to get the word out there.

In fact such a thing is not too hard to execute. One can simply create a group on linkedin where all the upcoming barcamps can be listed. Startup founders can join the group and show their interest in being demoed at a particular barcamp and tell which barcamps they can demo someone else’s startup. If there is good matche in interest/geography etc, the founders can take if offline and demo each others startups.  It may require some tweaking but you get the idea.

However as wise men say, ideas are worthless. However I wanted to post this on my blog and see what people feel about it. If there is enough interest, we can go ahead and create the linkedin group and take this forward!

Popularity: 11% [?]

I have recently made some changes to the blog and my site. I have moved my blog from prateekdayal.net/blog to prateekdayal.net. I had plans of making a real website but I finally accepted that I will never have the time or motivation to do so. I have also installed a new (less jazzier) theme. Even though, I have redirected the links, due to the move, some of the of images be broken. If you find something, just drop me a line or add a comment and I will fix it.

I had already moved my techblog to muziboo dev blog so there is no more a tech tab in the navigation menu. Since I use feedburner (who doesn’t?), the feeds should not be affected.

Popularity: 7% [?]

Here is a mail I received from The Smart Techie magazine, that can help you get there. Remember that this is the same company that organizes the startup city event every year.

Dear Sir/Madam.,

How are you doing?

Greetings from The Smarttechie-SiliconIndia.

The May 2009 edition of The SmartTechie will be on the top 25 Emerging technology companies. We are looking at what exciting technologies companies are working for and prodigy of leadership team and investors of private companies. A few of these companies will be profiled in the magazine. We are talking to several startups to see who are the Best 25 we can feature in the magazine. A panel of analysts, Venture Capitalists and our editorial team will select the companies.

It will be good idea to feature your company as one of the 25 Emerging Companies.  There is a nominal sponsorship cost, which I have indicated below. This package is specially worked out for smaller enterprises. If you can review the same and let me know by end of today, we could plan the next steps.

COST: Rs 30,000 - Top 25 Nomination.

We would be offering you:

1. Inclusion in the Top 25 Emerging Technology Companies list.
2. One page of Company Profile
3. One full page ad in the SmartTechie at a later date.
4. The company Profile will be displayed on the online magazine page too: www.thesmarttechie.com/magazine

COST: Rs 15,000 - Only Advertisement.

We would be offering you:

1. One Page Advertisment in the issue of Top 25 Emerging Technology Companies.
2. Online banner ad on : www.thesmarttechie.com/magazine
3. 1 Page Coverage

Please do let me know how we can take this forward. It will be nice to close this loop asap so that we get things rolling.

We can look at a mutual relationship so that your company gets more visibility. Let me know what you think.

If you have anything else on your mind, I shall be open for ideas.

If you need the contact, contact me and I will pass it on to you :)

Popularity: 10% [?]

Popularity: 10% [?]

The most common question that I get when I meet people is “How is Muziboo doing?”. My answer typically reflects reality, which is that Muziboo is doing fine but we still need one more year of solid effort to get ‘there’. If you ask me this question right now, I will also tell you that I am currently doing a couple of consulting gigs to build some cash reserve and that Muziboo has grown to a point where the revenues not only cover the cost of running the service but also a part of our living cost.

Quite surprisingly, there are a lot of rumors currently in the startup circle that we are folding up. I first heard it a month back and tweeted that we are not. But I am hearing it more often lately. I am not sure if it’s because of the realistic picture I paint or the fact that I am doing some consulting currently or simply the fact that Muziboo hasn’t taken off like Twitter or Facebook yet that makes people talk about Muziboo shutting shop.

So, I thought I would quell this rumor once and for all and also throw in some stats to talk about why we think we are doing fine and why we think we need at-least a year more to get ‘there’. Below is our all time traffic graph

As you can see, we have had most of our growth in the last one year. To us its not very surprising because, we believe, it is hard to figure out your business in the very first year and it also takes time to understand where you can add real value and have meaningful growth. When we started back in July 2007, we were focusing on growing only in India and we were trying to grow through a lot of offline channels - going to colleges, putting up posters, organizing an event etc. Around August 2008, we realized that offline efforts cannot help you build a profitable online business and hence we decided to focus on online channels like SEO and social media for growth. At the same time, we decided to have a more global focus. This completely changed our growth curve. Btw, here is what our last month’s visitors map looks like

We currently have traffic from pretty much across the world with US and India being the two biggest sources. This is definitely very exciting, challenging and rewarding. It also answers the question about market size that a lot of people ask us. By default, people assume that our market is only in India and therefore very limited and basically not worth doing. I honestly feel that its not the case and the map proves the point. However, international traffic comes with its own challenges. Its not a very easy task to cater to such diverse traffic and thats what we are gonna be spending next one year of our efforts on. Ofcourse not just that but you get the idea.

Hopefully this will give people some real info about what/how we are doing. So if next time someone mentions to you that Muziboo is shutting down, please do me a favour and point them to this post.

Thanks for reading this post.

Popularity: 14% [?]

Last few weeks, I have had a few of my relatives call me up and ask me to help them out figure reservations on some travel sites. These are well known (and well funded) sites like cleartrip and makemytrip so one would expect them to be super easy to use and book. However I was amazed at how screwed up the usability of these sites is in general.

On cleartrip for example, there is no help for the credit card field. For most people, transacting for the first time on the internet, its very hard to figure out if they should enter the card number with spaces or without. In fact its very easy to write a small javascript that will just take the credit card number and remove spaces (or dashes) if the user enters them. To top it, the CC field does not allow more than 16 characters so if you type with spaces, you will be stuck at 13 characters with no error/warning message.

I have had a relative struggle with this with this screen and call me up for help last week. In fact, it took me sometime to figure out (over phone) why the site was not accepting his credit card and why he was not able to punch in more than 13 characters. According to him, the number on the credit card was printed with spaces so thats what he expected to punch in there.

There are several other examples and I am sure a lot of these issues can be exposed with some usability testing.

Popularity: 13% [?]