Upgrade as You Grow
April 10, 2008 When you start out, generally you won’t have access to heaps of cash. You also won’t have a product that’s usable by the general public, and you need to spend as much time as possible getting your product live. You’ve got to make the most of what’s available, and then when your growth permits, upgrade.When you start out, generally you won’t have access to heaps of cash. You also won’t have a product that’s usable by the general public, and you need to spend as much time as possible getting your product live. You’ve got to make the most of what’s available, and then when your growth permits, upgrade.
You’ve got a fantastic idea, and you’ve got the development resources to make it happen. You know it’s going to take time to get your product perfected, but you need to get something out to the public so you can at least start building your brand and getting momentum behind your product.
As you get started, use what you already have available to you to at least get something out in the wild.
Take for example receiving payments for a web-based service. Ideally you have a secure page on your website where the customer plugs in their credit card details — a few seconds later you’re fifty bucks richer and they’ve got better access to your fancy new service.
The problem is, receiving credit card payments costs money. You need a business bank account ($20+ a month), a merchant account that allows internet use ($300+), access to a payment gateway ($400 setup, $300+ a year), an SSL certificate ($100+), and lots of time to debug your payment routines and ensure you comply with the rules and regulations that apply when you handle credit card payments.
You’ve just spent a thousand dollars, all to let someone pay you with plastic.
Before you spend that capital up-front, think about your other options. Why not get started using PayPal? There are fantastic developer API’s available that minimise the time your customer spends away from your site, and you aren’t footing the bill for the complex security and processing environment.
Once you’ve been running for a few months you’ll have a number of happy customers, and your product will be rolling along nicely. Now it’s time to look more seriously at moving to that internet merchant account and a ‘proper’ payment gateway. Your product is already out there and being used by happy customers, so you can pause development for a moment to implement the new security and processing features you’ll need. You’ve already got income from existing customers, and you’re not interrupting that critical time that comes at the beginning of the development cycle.
Another great example of this is web hosting. Do you need that $150/month dedicated server when you first start out? Why not try out a virtual server at 1/4 of that cost? You still get full root access and the ability to install what you like, and you’re not on a typical shared server so other customers of your hosting provider can’t read your files. Once your new services income hits that magic figure that means it can pay it’s own hosting costs, upgrade to that fancy quad-core system.
But there is no point upgrading if you don’t have to.