Q&A: How should I go about getting money to start my company?

Question by Joe Tommy: How should I go about getting money to start my company?
Hello. I am 13. I would like to start a company that runs a website. The website would be a business social networking platform, like Linkedin, but will have more features and different uses for different kinds of people. I have been looking around, and found a complete and very nice script for $ 800. The problem is, I don’t have $ 800. My parents won’t give it to me either. Also, I will have some thousand dollars in marketing in the early stage, although I will use free marketing techniques. I don’t want to get a job or do chores to make the start up money, and I’m too young to raise venture capital. There is a place called resellerspanel that gives you reseller hosting accounts for free. They provide the 24/7/365 support to your clients. They make money by taking a flat fee of any accounts you sell, but whatever you markup, you keep. I could probably be making $ 60 a year from each client. Should I do this to make money to start my company?

Thanks.

Best answer:

Answer by Fig Newton
I admire your spirit. I think you are going to be very successful but I think you are underestimating the cost of building something like Linkedin but with even more features. It took a pretty good chunk of money and talent to bring that together. It takes a lot more than an 800 dollar script to run that thing.

The other problem with this strategy, and lets assume it’s awesome, is that it’s not scalable. That means you are not going to be able to grow because you don’t have dedicated servers, switches, load balancing and security appliances, routers, raids, databases and bandwidth that can grow with your business. A single rack of equipment to do something like this costs over 100k. Facebook and linkedin have a room full of racks for the amount of traffic they handle.

Web hosts don’t provide that much support. Your 24/7 support isn’t as great as it sounds. What support do they offer? They don’t offer customer support. They are not going to fix bugs in your application. They are not going to provide any availability guarantees. They might not be able to handle a great deal of traffic or be able to provide the resources you need.

Since linkedin and facebook are so huge it’s going to be hard to differentiate and market your product. Not everything catches on like a wildfire (facebook, myspace, youtube). Other websites trying to squeeze into this market need to spend a great deal on advertising.

Linkedin and others are free so it’s unlikely that people are going to pay for this service. The best way to make money is to offer a good product and hopefully it will drive traffic to your site. Once you have the traffic you’ll attract advertisers.

Good luck to you. Sounds like you’ll get this figured out. You’ll probably be a billionaire by the time your 25.

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