How to start almost any business with no money [November 2020]

By: Arik Marmorstein, Spectroomz founder. I have previously founded and bootstrapped a crowdfunding platform enabling people to raise $9M. In addition I served as the head of growth of another notable startup. I also mentor startups and businesses at WeWork Labs.

About Spectroomz: Spectroomz lets you and your team hire an online researcher so you can take smart, research-based, decisions without losing focus on where you are really needed.

This is a hyper-practical guide on how to start a business with no money or capital.

I’ll cover:

1. Start with the problem

2. How to find business problems to solve

3. How to understand the problem (and the solution too)

4. How to interview users (includes a free tool)

5. Do I need a software developer?

6. Bonus: Validate your idea (includes a free tool)

7. How to get your first customers or users

8. Find a way to make money

9. Focus, co-founders and final notes

10. The tools I’m using

The Coronavirus crisis (Covid-19) is causing a significant economic downturn. Lots of people are going to lose their jobs and many can’t or won’t be able to find a new job anytime soon (that’s it for the bad news).

However, 18% of the people who started a business after the 2008 recession did so because they could not find a job.

Starting your own business with no money (or experience) is possible. In that sense, this guide will show you how to prepare for a recession.

This isn’t the type of posts about starting a business without money in 3 simple steps.

Starting a business isn’t easy and it requires time. But if you can’t find a job, and even if you can, starting a business is a valid decision. Below you will find the flow that explains how to start a business with little or no money. 

Every company is built around a problem or a need. You need to find a problem you care about.

There are many guides sharing business ideas you can start without money. Don’t let this guide you when choosing what to work on. Seriously, start with a problem or need you care about.

There are of course companies who work on a ‘nice to have’ solution and do extremely well (some will claim Twitter and Facebook started as a ‘nice to have’ companies), but I’m not sure this is the right timing to do so. 

1. Think about what’s broken in the industry you worked at or have expertise in. Make a list of all the things your previous employer lost money over (employees’ time is probably the most expensive resource). This list is essentially a list of potential companies. If for example, you were in the fashion industry, you might be able to come up with ways to solve the guesswork fashion brands need to do in order to keep up with the market trends. 

2. Build something that solves a problem for you. Many companies started that way. Say you are trying to go on a keto diet, and you found a way that makes it easier. Chances are many other people would find it helpful and be willing to pay for it. 

3. Research. You might know a specific demographic is experiencing several difficulties, but you don’t know exactly what’s the core problem. Start reading and writing about it. When I started Spectroomz I didn’t know it’s going to be a freelancing platform for autistic people. My son is autistic so I started researching on Reddit what his future challenges will be. You can passively research (i.e. read), or do so actively (I actually posted that question on Reddit r/aspergers). Once I got a sense that one of the main challenges is employment, I started searching for more content on Google Scholar, corresponding and chatting with other autistics about it and more. Spectroomz started as an autism employment blog, in which I wrote about what I have been researching.  

4. Important reading - Paul Graham (a notable startup teacher) wrote a great post on how to come up with startup ideas. Read it as if it’s part of this post.

A great way to understand your problem and your solution is by talking to people who experience it. Hopefully, you know these people or you are a part of these people (even if you offer a solution to a business, it’s experienced by people within that business). If you don’t have access to them, find them on forums (Facebook groups, Reddit, etc.), through friends and introductions or simply by visiting places they hang out at. For example, if you are developing headphones for people who listen to Metal music, go to clubs or music stores they hang out in and approach them. Most people will be happy to talk about a problem they care about. Think of this as an investigation. You can’t be shy at any point when you build a business, and especially here. 

You should NOT ask people what’s their proposed solution. Instead, you should focus on the problem and how they experience it. Here’s a proposed set of questions you can use to interview/send them (taken from a great StartupSchool lecture - more about them at the end):

After you conducted your research, you probably have potential solutions in mind. Think of them as assumptions (this sentence is extra important).

Don’t rush to spend money on renting a place, buying stock or hiring a software developer to develop your app.

Instead, think about the leanest ways to validate your assumptions (the professional term for it is ‘Minimum Viable Product’).

Here’s an example from Spectroomz. Initially, I had two optional ways to solve the problem autistics experience with finding and maintaining jobs. The first solution was starting a job board for autistic-friendly companies, so they can hire autistic people for on-site full-time jobs (pre-COVID).

The assumptions I was looking to validate were that companies will hire autistics for full-time positions and that they will be open to becoming autistic friendly. 

Theoretically, I could have paid a software developer (or partner with one) to build a job board with all the features I thought needed. The justification for doing so might have been that companies will want to see a ‘serious’ established platform in order for them to post a job and pay for it. This is wrong, and doing so at this point would have cost a lot (in time and money). 

Instead, I assembled around 500 emails of diversity and inclusion professional who work at top companies (you can hire a freelancer to find those for you or do so yourself -  learn how to find people’s email here) and sent them an email offering them to post a job (you can use your own Gmail to do so, there are integrations that help you do so efficiently and many of them have free plans.

Check Streak which enables you to send personalised group email or Mixmax that have a free plan you can use). 

Here’s the template I sent:

46% of them opened the emails and 10% replied. I had several calls and understood pretty quickly this isn’t on the top of their priority list. 

This test, in addition, to discussions I conducted in parallel with autistic people led me for starting Spectroomz as a platform for freelancers and not as a job board. 

If this question is relevant to the type of business you are building, then probably not for the first phase in which you are testing your assumptions.

There are free site builders, free tools to run surveys like Google forms, and if you need extra features the other tools are not expensive at all. I’ll elaborate below on the tools I use.

The same goes for different types of businesses. Find the leanest way to test your assumptions. If you are building a restaurant, one of your assumptions will probably be if your food is good. Testing this doesn’t require launching a restaurant. You can start at home, offering deliveries to your neighbours and the people around you. If it’s good, you’ll know and will have money to take it to the next level. 

A good example of doing things lean is Airbnb (as described in Startup School). Initially, they didn’t even deal with the money. It had been transferred directly between the guest and the property owner. They just had a simple website that enabled guests to find relevant house owners and contact them. 

I built a tool to evaluate your business idea, you can try it here (more relevant to startups though)

Following your research and after talking to people who experience the problem you decided to solve, you probably already have your first users.

Whether it’s true or not, the thing here is not thinking about advertising on Google, Facebook, etc. We don’t have the capital for this. 

Instead, think about doing things that don’t scale. That means that you should not think about scale, or getting to millions of customers. Initially, that’s totally okay to get users one-by-one. Phone calls, emails (cold emails worked great for me), posting on forums, actually getting out and talking to them, anything goes. 

In addition to the above, you can also start writing a blog that caters to your potential users (with Spectroomz I did so even before I came out with the solution).

This can potentially enable you to rank on Google’s first page for relevant keywords to your business and get ‘free’ traffic (it’s called SEO - search engine optimization).

There is so much content about SEO, but the principle is simple. Write valuable content and get other websites to link to it (don’t get obsessive about getting links, there a lot more to SEO, I wrote about it in this SEO for SaaS companies guide, but it’s good for any company).

This is how I did SEO for Spectroomz initially (with screenshots), and a lot more.

In addition, if you decide to get deep into SEO, Ahrefs’ blog Backlinko are probably the best free sources out there today, they are free.

Your purpose here is to solve a real problem for a specific group of people. If you’ll do that, the first users you’ll get will simply tell about it to others. 

I wrote two more helpful posts that could help you get free users: How to get media coverage (for free) and 8 lead generation ideas.

You are building a business. Make sure you have a solid business model and start charging customers. If you are solving them a real problem (yes, even if your site looks bad and you are doing things manually), they’ll pay. 

Treat your company as a simple math equation.

On the left side of it you’ll find your “north star” - the one thing you are trying to achieve.

Ideally it’s revenue, especially if you are building a traditional business but also if you are working on a startup.

On the right side you’ll find all the elements that lead you to your desired outcome.

I have written

Airbnb:

New users Revenue = Travelers + Property Owners + Match with each other

Ecommerce site

New users Revenue = Store visitors + find products + complete purchase

Meditation app

New users Revenue = App installs + sign up + upgrade to paid

Barber shop

New customers revenue = Visit Barber shop + decides to take an haircut

So how does this help you?

1. Focus (more about that below). Lack of focus killed many businesses. It's easy to get lost among the tasks, so every time you consider working on something, ask yourself if you are focusing on one of the elements of your company's equation.

2. It helps you set tasks that will lead to the desired results. Let's take a look at the mediation app for example. One element is to get app installs. We can take that and create a sub-equation that will help us think and focus on what leads to app installs--

Get App installs = word of mouth + Ads + SEO + media coverage+ Influencers marketing + email marketing ....

You see? Now we have different channels we can prioritize to get new users.

3. We can use the same method for working on retaining new and existing users as well as resurrect users we lost.

Learn more about treating your startup as a math equation.

Focus

As said, You’ll have many distractions. For example, some people you’ll talk to will offer you to collaborate in ways that are appealing but don’t quite take you towards your solution.

Spectroomz is a freelancing platform for autistic people. This is my equation:

Revenue = a client + hires + an autistic freelancer + get great results. 

This is essentially my business. As long as I’m doing something that’s directly related to one of the above I’m focusing. The minute I deviate from it, I’m not.

Co-founders

It’s better to work with a partner. But don’t let it hold you. Start doing the above and look for co-founders with completing skills to yours in parallel.  

Startup School

If you are working on a startup, consider joining StartupSchool. It’s a great environment (online) for starting your own startup. It’s free and open to everyone. 

No expenses

While you can find ways to starting your own business without money, your time is required, and since your time is the most important asset, you do have expenses. 

ConvertKit (referral link) - an email marketing tool for startups, businesses and bloggers. Their set of tools enables you to capture emails of visitors on your site, send a set of emails to new subscribers, manage your subscribers, send single mass email campaigns and automate your email marketing based on different types of subscribers. I have also reviewed ConvertKit.

Zapier: - enables you to do helpful automations without writing one line of code. For example, send an automatic email after someone submits their details via a form. They have a free version that is relatively generous. 

Airtable - helps you organize data in a spreadsheet-like interface that has capabilities of a database. For example, with Spectroomz I use it to manage incoming projects and applicants. I connect it using Zapier to the project and applicant’s submission forms. They also have a pretty generous free plan. 

Mixmax - an email marketing tool that integrates with your Gmail (this is a Mixmax review I wrote). I use it to do email marketing, track my email performance and sending sequences (a series of automatic emails that are sent if a certain condition is met. For example, if the first email wasn’t replied, send an automatic followup email). They have a 14 days free plan, after which they are less generous (but I really like working with them).

Typeform - a form and quiz building tool. I use it to get freelancing applications, clients’ project as well as for my SEO needs. They have a generous free plan. 

Ahrefs - an SEO research tool I really like. They don’t have a free trial.

Substack - a free email newsletter tool.

Spectroomz (as mentioned, I’m the founder) - I’m hiring exceptional writers, researches and designers that are also autistic.