November 8, 2013
The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
As a bootstrapping startup, every dollar spent must go toward something essential. Paying for a premium software knowing there's a lighter version available for free indicates this as a vital part of a startup's function. You're probably not going to pay for Salesforce Enterprise before you have any customers. So then, which services are most crucial to a young startup's success? Which software are worth allocating a very tight budget to? And which are the cream of their respective crop?
We asked nine young entrepreneurs to share what their first software / service purchase was, and why? Their insights are below. Bon Appétit.
9 Foundational Software and Services for Startups
As a service company, having a solid CRM system to track our leads, prospects, sales and more is crucial to our success. We went with Infusionsoft because of its ability to automate so many of our repetitive tasks. It's amazing how much time we are able to save by having particular sequences triggering automatically. More importantly, it allows us to deliver a better and more consistent customer experience. We don't need to worry about remembering to do little things because the system has our back and takes care of most things!
One thing you can guarantee at a startup is that you will be inundated with paperwork that needs to be signed. Examples include employment contracts, term sheets and stock option agreements. EchoSign makes it simple to get signatures on documents quickly and easily. The interface allows you to define signature fields for you and the signer, send to single or multiple parties and manage the document during and after signature. The archive functionality ensures that you can access your entire history of contracts in a heartbeat. In comparison to signing paper contracts on a cumulative basis, EchoSign has saved us days of time.
We started using Mixpanel early. We needed a system for event tracking that went beyond the basic data that Google Analytics provided. The ability to track specific events was important to us, and Mixpanel saved us the trouble of developing an in-house solution for tracking these small yet very important events, like clicking on particular buttons. By hand-picking the events that we wanted to track, we essentially built a custom dashboard for tracking the most important aspects of our business. Mixpanel has great pricing for startups as well, so you have every reason to track user behavior for optimization.
4. Google Apps
We bought Google Apps first. We needed email, and it was the fastest way to get up and running. Plus, it came with the basic tools we needed to get started, such as shared calendars and shared documents. It was fairly inexpensive, too.
The success of my startup hinged on providing fresh, original content on a regular basis (typically three to five times a week) on a number of niche websites and blogs. There was no way my staff could keep up with the workflow, so I hired a series of freelancers via the Internet to deliver the copy we needed. To protect my startup, the first service I bought was Copyscape to detect instances of plagiarism. We used Copyscape to check each incoming blog post, article and Web page submitted by freelancers. Copyscape also protected my sites against content thieves by monitoring the Web for copies of my material and sending me the results via email.
6. QuickBooks Online Edition
When you're running a startup, it's incredibly important to understand how much money you have left to continue operating your business at any given time. QuickBooks was the first purchase I made when I started my company because I wanted to reflect every penny of revenue and expenses. This software does a great job of making bookkeeping and accounting really easy. Be sure to work with your accountant to set up this software properly up front, and then consistently include new invoices, payments and expenses into QuickBooks each week. The profit and loss, cash flow, and balance sheet reporting that QuickBooks provides will help you tremendously!
Teambox is an online collaboration platform that helps teams work better together. Teambox was the first online service our company paid for out of the gate. It was important that we had one central platform on which we could share our projects, tasks and files.
8. A Payment Processor
Although we didn't stick with the first payment processor we paid for, it was our first subscription. The logic is simple: if you don't have a way for customers to give you money, then it's tough to tell if any other part of your company is working properly. You can't test your marketing, so why bother pushing hard at promotions? The same holds true for most of your infrastructure and account management tools. A landing page with an offer and a payment processing form is the best way to test an idea or launch a new product. Exactly which payment processor to use is a more complicated question. I'm currently a fan of Stripe, but it may not be the easiest to start off with for many people.
For a software startup, setting up server infrastructure is your first step in creating a functioning product. We found Rackspace was the best solution for us. We needed to be able to serve a lot of rich content to our users in a fast, reliable way, and Rackspace allowed us to do this without having to dedicate too much internal resources. If you're just looking for something simple to get you up and running, then Amazon Web Services is also a good solution. Whatever the specific needs for your product, take time up front to analyze them and be thoughtful about infrastructure decisions, as they will surely have an impact on your product's quality and performance down the road.
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