Web 2.0 Entrepreneur

How much money do you need to start a Web 2.0 business?

• Posted by Tengku Zahasman on June 8th, 2007 filed in Web App Development, Thoughts, Entrepreneurship, Financing/funding


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There’s actually no definitive answer to how much capital you need to start a Web 2.0 business. How much you need may depend on so many factors that it can sometimes be a thousand bucks, 5 thousand bucks, 10 thousand bucks, 20 thousand bucks, or down to only a few hundred bucks. Those factors include what type of application you’re building, your own skillset, existing resources, whether you need staffs (if you need then how many of them?), whether you need an office, outsourcing, additional machines, servers and whatnot. Even though I can’t really estimate how much you need to start a Web 2.0 business, I can roughly say that if you spend more than 10 thousand bucks just to develop and launch your web application, then I think you’re overspending. And you better think of how you can mitigate your spending fast because touching that 10 thousand threshold shows that you’re spending too much on unnecessary things. Spending too much money before you even start making money is bad because that means it’ll take longer for you to be in profit. Not only that, if things doesn’t turn out the way you planned it to be, you may even go bankrupt for spending more than you need on the beginning phase.

Sometimes I find it rather disturbing when some of the new Internet startups claimed to have spent over millions of bucks just to get their Web 2.0 ideas developed and launched. That is totally unacceptable in my opinion. Even the overall cost of development, launching, marketing and maintaining of the web app should not take up to millions or even hundreds of thousands of dollars a year. Why? Because we’re on the INTERNET business. And when I say INTERNET that means things that used to be 10,000 bucks in real life can be absolutely FREE in the cyber world. Consider some of things below:

- Development tools are free (Komodo Edit, PHP+Apache+MySQL, Linux?)
- Open source scripts (which are free) can be leveraged for creating your app’s blog, forum or support center.
- Communication is free via E-mail, Skype, IRC or Instant messaging.
- Outsourcing is cheap.
- Existing programming components can be reused. Think about rapid PHP frameworks and Ajax frameworks
- Google is your library for doing researches
- Advertising can be free by leveraging search engine marketings, social networks, blog marketings, forum marketings, the good-ol “word-of-mouth” marketing. Or even if you purchase advertisings on certain websites, Google Adwords, Advertlets, or other PPCs, it won’t take up so much to kickstart the hype.

There you go. I just can’t help but wonder what have some of these companies spent on that took up millions of dollars for their web application business. Internet business is meant to be cheap but highly profitable. Let’s just keep it that way… Truemors did it with 12 thousand bucks overall. They could’ve spent way less…

How to get funded for Malaysian startup entrepreneurs

• Posted by Tengku Zahasman on April 29th, 2007 filed in Entrepreneurship, Financing/funding


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Internet startups in the Silicon Valley are used to getting funded by the many Venture Capitals and Angel Investors they have over there. That’s why Internet Startup companies in Silicon Valley blooms up like mushrooms after a rain. Unfortunately, we don’t have the same luxury here in Malaysia. You can’t easily find a VC to fund your startup… and most of our parents or friends are still pretty clueless/critical about Internet ventures to be your angel investor. But fret not, the Malaysian government does have allocation for the Malaysian Internet startups to get initial capital and start their businesses to boost the ICT industry in Malaysia. And there are also Malaysian companies that does businesses in Venture Capitals.

1. Technopreneur Pre-Seed Fund Programme

This fund is introduced by MDEC (Multimedia Development Corporation, Malaysia). In this programme, your startup business can get a conditional fund of up to RM150,000 that you can use to develop your IT business plan into commercial projects. The good news is that apart from the money, you will also get the benefit of their mentoring services and use their MSC status shared lab facilities.

Take note that ONLY INDIVIDUALS are eligible to apply. You can’t apply under a business name. In other words, you’re not eligible apply this fund if your business already has an established Sdn Bhd company name. You may read more information about this on their website.

- Download Guidelines and Application Form
- Download FAQ

2. Cradle Investment Programme

This programme offers RM50,000 of fund that you may use for the development of your project’s prototype, proof of concept or business plan. Same like the pre-seed programme above, this fund is also only for individuals, not companies. Their focus is to give entrepreneurs a headstart in realizing their unique ideas (sounds a lot like you?). You can make application online. Visit their website for more thorough and detailed explanation on this fund.

- Read Application Guide here

Before making an application to any of these funding options, be sure to have a strong business plan document to present them and to get their attention, besides avoiding yourself from looking foolish. Be confident of your project. Also be sure to do enough research about a certain funding programme so that you know what you’re dealing with. The question is… should you apply? Do you really need them? I’ll talk about that sometime later

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Credit to webwatch for providing such useful information