I was really fortunate that in mid 2006 when I started LeisureLogix I had the consulting experience garnered from 10 years consulting as the Solutionz Group to draw on. Not only did I have the experience, but I also had a group of colleagues/friends who were willing to risk right along side of me in getting the business off the ground. Having trusted allies who are willing to work for equity and to cheer you on during tough times as your true advocates is one of the most important resources that an entrepreneur can have.
Since we were building technology to fill a gap that I had seen in my consulting within the travel industry, the next key ingredient to the plan was to have a launch partner lined up. The alternative is going the “if we build it they will come” route, which only works in the movies and if your name is Kevin Costner. Due to our relationships in the travel industry we were blessed to able to line up a major online travel agency that agreed to put our product on its site once it was built, without seeing so much as the mockups of the screen design.
The next step was finding a technology partner who would work on a fixed price with payment terms that we could live with. It is so easy in a technology project of this magnitude to let scope and your budget spiral out of control once you get started. It’s even easier to miss the total cost of operation beyond the build phase of a project. (More about that in another blog.)
On the funding front, my initial partner and I began by putting in matching funds each month to meet the operating cash requirements, which we continued through the end of 2006. Pretty quickly, however, we realized that we had to find outside capital to make it the whole way. Anyone who has sought external capital during the build phase (also known as “pre-revenue”) of a project knows that it is a very tall order. But at that juncture, it was “do or die.” We had gone too far to turn back.
Excerpt from Bootstrap Business - Available August 2009
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