This is easy for service-based businesses which operate in a cash transaction world. When I started Mac-Sys, we were earning money from Day One but that’s not the same as being profitable. When you can do a piece of work and then get paid for it, that’s being profitable.
In this TNW article about “Why should you want to pay for apps“, Tapbots co-founder Paul Haddad says “We’ve been profitable since day one”. I’m not saying he’s wrong but in the months that it took to build their first product, I’m presuming they had living expenses while they worked on their first product, WeightBot.
This is why so many companies start out as a second job. Smart developers and designers who have time on their hands and an itch to scratch.
In a depressed region with salaries 20% lower than the UK average and an economy dependent on low wage jobs (call centres etc) and public sector subsidies and with higher living expenses (due to shipping costs, lack of economies of scale), it’s going to be harder to start things. And it pretty much eaves folk who are not designers and developers by trade out in the cold. Maybe these folk without the requisite skills have no business in starting technology businesses?
Maybe that’s the problem. We have subsidies in place to help people who are not technologists with skills to create technology businesses. Maybe we’ve been looking at this the wrong way.
I’m not so sure. Technology businesses are only trying to solve a problem just the same as any other business. They just use technology to do so. Lack of ability doesn’t mean you can’t have a good idea. So the question is: what are the options for people with ideas (and no/some money) but no ability to execute? I think there are only three options: 1. Learn how to do it. 2. Partner with someone or a company that can do it. 3. Sell your idea. 4. Do nothing.