Had a chat with founder friends on tools: (1) when do we pay and why (2) how do we evaluate tools, and (3) an new idea "Github for lawyers"
https://www.youtube.com/watch?v=B-7AZl_C-J4
00:20 What tools are you paying for?
03:09 What makes you want to try or buy a new tool?
06:49 What new tool do you think should be built? ("Github for lawyers")
I would like to hear thoughts from other early stage founders (and tool builders). In my previous startup (as a founding team member, but not as a founder), the company raised tens of millions of $$ at very early stage, and had been spending money on tools very liberally (including editors that easily costs hundreds of dollars, and subscriptions to BI databases that cost thousands). The rationale was growth was far more important than saving a few bucks. But it weren't as effective as we thought. The team seems to end up arguing endlessly on which tools we should use, and why something is better than the other. The productivity wasn't really increased in some sense.
I carried this line of thinking when I started my company. When it comes to engineering tools (IDE, source controls, etc.) and collaborations (GSuite, Slack, ...), we pay almost without second thoughts. But when we failed to reach product-market fit for our first few products and had to cut budgets whenever we could (as runway becomes tight), we already got sort of too comfortable with these paid tools and found it really difficult to part way with them.
As founders, should we start by using as many free tools as possible and do as much as we could to stick to the principle of "not paying for anything"?
The question always comes to look at the scales of money vs time, which do you have more? how valuable do you find the thing, tool or money (just another tool)? and what's the opportunity cost/alternative use...
It probably makes sense to put some amount levels for things.
And adjust it with time...
At times I've been employed and seen a service with 5$-20$ that would save me a couple of days of work, but that company was huge and didn't have budgets for leaf people, I'd need to go like 3 levels up to discuss this, so I spent 3 days work in place.
There is also a social part to it, cutting benefits has a moral affect.
But if your bootstrapping, got time, but no money, you scrap.
There is also another saying the money only magnifies, it doesn't matter the direction, so if your producing a loss every month, pouring money in is probable to just magnify the loss. Just as money on something that works might make it work better... to a point. everything has a break point.
So, balancing act ^^.
Well said. I think "money only magnifies" sums it up really well :)