Guy Kawasaki has a very detailed post on his blog, in which he give a by-the-numbers account of his experience with launching Truemors. You may remember that we wrote about Truemors twice: first to give our initial (quite lukewarm) impressions, and second to defend the project from unjust and overly harsh criticism.
Regardless of what you think about Truemors, Guy’s latest post is a great read for anyone considering starting a similar project. Guy has been in the IT business for a long time, and a look at his priorities is very interesting. Personally, I had no idea that almost 5000 dollars had to be spent on legal fees on a site like Truemors. On the other hand, he spent $4500 on development of the actual service, which sounds relatively cheap.
Another revealing fact is Guy’s business model: create a (cheap) service, see if people like it, and put some ads. I like it much better than: create a service, get VC funding, hire 10 people you don’t need, rent expensive office space you don’t need, buy expensive equipment you don’t need, swarm your service with ads when you realize that you’re gonna start losing money soon, and then desperately try to sell it when you realize that ads don’t cover half of your expenses.
I don’t think Guy’s article is a very good example of what it takes to launch a web 2.0 business these days.
1. He purchased 55 domain names - at more than $20 a piece - ludiscrous, by any standard.
2. He spent $5k on legal fees - what non-funded company can afford to do that? Especially if they are offering a real service! Truemors is a message board with all of the features ripped out and it cost $5k? Most companies these days will skip and/or use prewritten, freely available, documents off of the Internet.
3. He doesn’t mention anything about his SMS keyword service - normally a $1K/month bill.
4. He doesn’t mention anything about his voicemail service - the people parsing his voicemail for Truemors just hooking him up?
Basically, Guy under-reported his costs in this article, spent way to much on stupid stuff, doesn’t really realize what it takes to launch a company - by yourself - these days. He gave it a good shot, but got stuck in his VC ways with “protect, protect, protect” (ie. registering every thing that half-ass relates to the word truemor and the legal fees).
Next time, Guy should give himself less than $6k and launch under a pen-name - then tell us how easy it is.
@Michael: I found exactly points 1&2 interesting, simply because it’s not something I would ever consider doing. I’m not sure that he did everything right (actually, I think he did many things wrong) with this launch. But, I like to see his perspective, right or wrong.
Are you sure he did it for $12.000 or was that $12,000.00?