How much money do you need for your startup? [Poll]
A new poll has gone live on StartUpArabia, you can find it on the first sidebar on the right or vote straight from this post.
This poll is mainly aimed at Arab entrepreneurs who have already launched their startups and are looking for financing, or those who have yet to launch their projects and will be needing some funding.
The question is: How much money do you need for your startup?
The poll gives a number of ranges that are based on some of the feedback I’ve gotten from entrepreneurs I’ve met and talked with around the Arab world.
Feel free to further expand on your response in the comments section of this post.
It totally depends on where you are starting up, and the type of business you are working. In any case, the more resources the better.
It totally depends on where you are starting up, and the type of business you are working. In any case, the more resources the better.
Yes, I agree, every startup has its specific needs, according to where they’re launching their business, what type of business it is, …etc.
But the idea of the poll pretty much counts on those differences to try and see what kinds of budgets startups in the Arab world are looking for, across all countries, all types, …etc.
I think the results should be interesting to know what volume of investment is needed for internet and technology startups in the Arab world; and whether the existing investment players entirely fulfill the existing need.
Yes, I agree, every startup has its specific needs, according to where they’re launching their business, what type of business it is, …etc.
But the idea of the poll pretty much counts on those differences to try and see what kinds of budgets startups in the Arab world are looking for, across all countries, all types, …etc.
I think the results should be interesting to know what volume of investment is needed for internet and technology startups in the Arab world; and whether the existing investment players entirely fulfill the existing need.
A big part of start up costs go into the product and/or the service development. Even in the tens of thousands, this is very low in our times compared to the past. A second big investments is marketing.
My minimum estimation is USD 100K+ for any startup to consider at minimum, launching a product or service. If you factor the cost of development, for the web start up, you are looking at at least 1/2 initial capital. In my case, as im starting up right now, this is USD 70,000 alone! Plus marketing costs for the first few months and the cost of doing business, that is, office space, salaries, etc.
The cost of doing business in your location is another factor. In a place like Dubai, UAE, the cost of doing business is a big detterent for new startups, especially decent office space. Although Young Business Leaders and other good community programs in the region can help with free office space which can go a long way in cutting initial costs.
My advise: get your earnings logic and overall business plan right. Good luck to all the start ups out there!
A big part of start up costs go into the product and/or the service development. Even in the tens of thousands, this is very low in our times compared to the past. A second big investments is marketing.
My minimum estimation is USD 100K+ for any startup to consider at minimum, launching a product or service. If you factor the cost of development, for the web start up, you are looking at at least 1/2 initial capital. In my case, as im starting up right now, this is USD 70,000 alone! Plus marketing costs for the first few months and the cost of doing business, that is, office space, salaries, etc.
The cost of doing business in your location is another factor. In a place like Dubai, UAE, the cost of doing business is a big detterent for new startups, especially decent office space. Although Young Business Leaders and other good community programs in the region can help with free office space which can go a long way in cutting initial costs.
My advise: get your earnings logic and overall business plan right. Good luck to all the start ups out there!
Interesting indeed.
Based on the results here, some people may confused prototype/proof of concept and startup stage.
Fund raising should bring your product/service to the market and not just help you build your first demo.
Interesting indeed.
Based on the results here, some people may confused prototype/proof of concept and startup stage.
Fund raising should bring your product/service to the market and not just help you build your first demo.
@Hashim & @Djilali: I think you both raise a very important point here, which is: are Arab entrepreneurs really taking everything into consideration when they think about how much money they need to make their startup work? Or are they just thinking about the initial phase of launching a prototype, forgetting about all that comes after it?
@Hashim & @Djilali: I think you both raise a very important point here, which is: are Arab entrepreneurs really taking everything into consideration when they think about how much money they need to make their startup work? Or are they just thinking about the initial phase of launching a prototype, forgetting about all that comes after it?
If we are talking about serious online startup who wouold like to launch phase 1 of the project. I think they require a min of the following amounts depending on the location:
In UAE : you need a min $120K
Rest of GCC : $50K – $75K
Jordan : $25k – $40k
Egypt : $20K – 30k
Each location has its advantages and disadvantages but this is another issue.
If we are talking about serious online startup who wouold like to launch phase 1 of the project. I think they require a min of the following amounts depending on the location:
In UAE : you need a min $120K
Rest of GCC : $50K – $75K
Jordan : $25k – $40k
Egypt : $20K – 30k
Each location has its advantages and disadvantages but this is another issue.
Great question.
I think you can start a startup with next to nothing right now. You can rely on open source tools, use cheap hosting or cloud computing services like Amazon S3, and build the product yourself or with one or two cofounders.
I built Qaym myself as a nights-and-weekends project. So far, it only cost the hosting, and a little experiment with AdWords. Of course this doesn’t take in mind my cost of living, that’s taken care of by the day job (which I’d like to quit at some point and do the startup thing full time). My point is that it is possible to develop and launch a product with very little money, but a good investment of time and effort — although having the money could make it easier to build and faster to ship.
The web allows, actually begs for products that solve a small and specific problem. And the best way to do that is with constant and continued iteration, rather than spending a lot of resources building a monolithic project then releasing it to the world. Web applications have to have the ability to adapt to user feedback, and sometimes even go in a totally different direction. Flickr, for example, started out as an online game that at some point had a really good photo sharing feature. We all know how that story ended.
I voted for ‘none’. But I actually mean it is possible to do it for < $10,000.
Great question.
I think you can start a startup with next to nothing right now. You can rely on open source tools, use cheap hosting or cloud computing services like Amazon S3, and build the product yourself or with one or two cofounders.
I built Qaym myself as a nights-and-weekends project. So far, it only cost the hosting, and a little experiment with AdWords. Of course this doesn’t take in mind my cost of living, that’s taken care of by the day job (which I’d like to quit at some point and do the startup thing full time). My point is that it is possible to develop and launch a product with very little money, but a good investment of time and effort — although having the money could make it easier to build and faster to ship.
The web allows, actually begs for products that solve a small and specific problem. And the best way to do that is with constant and continued iteration, rather than spending a lot of resources building a monolithic project then releasing it to the world. Web applications have to have the ability to adapt to user feedback, and sometimes even go in a totally different direction. Flickr, for example, started out as an online game that at some point had a really good photo sharing feature. We all know how that story ended.
I voted for ‘none’. But I actually mean it is possible to do it for < $10,000.
@ Jihad,
lets focus on online business startup only.
Of course you can build your solution yourself and benefit from almost free technology resources thanks to the open source community,
but did you factor the acquisition cost of traffic and users?
I’m not talking about SEO and SEM only: what about sales (even for advertising based revenue model, trust me adsense won’t feed you and you will need to sell your inventory to help covering operation costs), customer relationships (subscription model means customers support costs), operational costs (license, office, utilities, finance)?
As Mohamed highlighted it, do you want to launch a Fun/Side project or do you want to make your startup work?
@ Jihad,
lets focus on online business startup only.
Of course you can build your solution yourself and benefit from almost free technology resources thanks to the open source community,
but did you factor the acquisition cost of traffic and users?
I’m not talking about SEO and SEM only: what about sales (even for advertising based revenue model, trust me adsense won’t feed you and you will need to sell your inventory to help covering operation costs), customer relationships (subscription model means customers support costs), operational costs (license, office, utilities, finance)?
As Mohamed highlighted it, do you want to launch a Fun/Side project or do you want to make your startup work?
@Djilali
Word of mouth is one of the best tools for customer acquisition. And it is free. If you build a valuable application, it’s easy to get early adopters to try it out. And if they find value in it, and you keep making it better, they’ll spread the word around. Happy users will always be excited to tell their friends about a great service.
Sales and customer relations can be handled by the founders. You can also get sales people who you pay through commission only.
If you look around, there is a type of online business that are bootstrapped. Where you start with little capital and slowly build the venture from the income it generates. PlentyOfFish.com for example is bootstrapped, run by one founder, and pulls in $5 million a year from ads.
Of course some types of ventures require upfront capital. And at times, you have no choice but to raise funds (to keep up with growth for example). But the point remains that for some types of ventures, it is _possible_ to develop your product, release it, and become profitable without needing a lot of money.
@Djilali
Word of mouth is one of the best tools for customer acquisition. And it is free. If you build a valuable application, it’s easy to get early adopters to try it out. And if they find value in it, and you keep making it better, they’ll spread the word around. Happy users will always be excited to tell their friends about a great service.
Sales and customer relations can be handled by the founders. You can also get sales people who you pay through commission only.
If you look around, there is a type of online business that are bootstrapped. Where you start with little capital and slowly build the venture from the income it generates. PlentyOfFish.com for example is bootstrapped, run by one founder, and pulls in $5 million a year from ads.
Of course some types of ventures require upfront capital. And at times, you have no choice but to raise funds (to keep up with growth for example). But the point remains that for some types of ventures, it is _possible_ to develop your product, release it, and become profitable without needing a lot of money.