CD QuestionWe've recently been getting some questions about what the story is with Collective Detective? I thought it might be a good idea to write a post about how we're set-up and operate because:

  • People were asking: Our accountant, people from high school tracking me down, Mom, etc.
  • We haven't posted an update in awhile
  • We're about to make our annual pilgrimage to SXSW where we'll be telling our tale. However, many of these people will have had many drinks and/or have talked to many other people, so we thought it best to have a refresher post ready when they wonder how our cards wound up in their pocket and looked us up.
  • There are others out there who operate in a similar capacity or are thinking about it. You're not alone!

It's a Micro-What?

Collective Detective is what is best described as a "micro-business." We develop creative projects on the side. A few month's ago, Jason Calacanis, CEO of Mahalo, did a pretty good summary of what exactly this is in an email called "The Future of Startups." He used the term "micro-startup," but we prefer "micro-business." "Startup" is sometimes an abused and trendy buzzword like "beta." We've got a plan around being profitable with our projects quickly and have long-term goals and vision. We're not looking to build something to offload for a quick payday or build something with no idea how to monetize it.

Anyway, the whole email is a very good read, but here's the summary I'm referring to:

The zero cost startup has led to the age of the "microstartup." It’s no longer two folks in a garage hoping to build a prototype in order to land a huge VC round, then getting millions of dollars to build out an office. Microstartups are sustainable from prototype to launch and on to a core user base, all for around $5-10,000 in costs.

That's us in a nutshell. Some people buy an old beat-up Ford Mustang to work on in the garage on nights and weekends. For us, new ideas are the cars in the garage we enjoy working on.

Cash or Umm…Cash?

cashWe're self-funded. We put money into the business account and have a 1-to-N prioritized budget. The money covers reoccurring expenses and accumulates for known future expenses. If the money isn't there, that next item or task waits until it is — simple as that.

We're a small team. Coding, graphics, wire framing, paperwork, contracts, business strategy, etc. are all currently managed by two people. We have careers, so we work nights and weekends on our projects. We have a lawyer, an accountant and a few people advising us. As you can imagine, this keeps us pretty stretched resource-wise, so a long development cycle is something we've had to be content with. We're nimble and can quickly adjust, but we're not yet that fast.

Patience Helps

Collectivus, our current project, has been worked on for years in some way, shape or form, but it was only around a year ago when the concept was really dusted off and reworked into what we now refer to as the "manifesto." It's a detailed plan of the entire vision.

patienceA few months ago, we started making planning choices of what to break off from the manifesto in order to create a scope of work that would be the initial release and could be executed against without external funding. This is another important tip regardless of your project size and resources: No matter how passionate you are about aspects of your project, you need to be merciless about what to cut and where to prioritize. You want to release as fast as you can and iterate on that; building some monolithic app up-front is a bad idea. Of course "fast" is relative, especially in our case. It's not easy and you sometimes need to recognize you're too close to it and seek outside perspective to get back on track.

It's Not (Just) About the Money

So I guess the last piece of useful information (if you've found any of this useful) is an explanation of why we've chosen this path. We certainly have enough industry know-how, connections, and experience to have pursued VC or angel funding, even before the economy went belly-up; we're bootstrapping on purpose.


A few reasons:

  • First is vision. we have a very specific vision and when someone's giving you a check, you're giving them control. The value of that control is very lopsided if you don't have a product building value through growing usage, brand-recognition, and revenue. We're not against outside money when the time or need is right, but right now, we can get by without.
  • Second is passion. It's great that people "in the know" are excited to hear about Collectivus and frustrating sometimes that progress on it isn't faster, but if this project was being driven by a need to get it to market before the grocery money ran out, it wouldn't be as good.
  • Third is harder to explain. We're not building you're typical web application, it's something else. That "something else" quite frankly would have added layers of writing extraneous proposals and plans. We'd rather spend the time just building it and showing you what we mean.
  • Last is life. Sometimes you need to put the code down and walk around in the sunshine. We see too many people who are consumed by the start-up lifestyle: All work and never coming up for air. I was that guy in a past life. It doesn't make us any less passionate about our work when we take a weekend off to go to New York. If someone's funding us, our work ethics wouldn't let us rest until that ROI was achieved.

I hope you've found this informative. We're not a typical business, but where's the adventure in being typical?