Tech Startups: – a small part time startup.

(This blog was originally written two weeks ago – didn’t have time to post it)

Last week, we had Alberto Torrón, founder of, a simple store selling power tools.  It’s a “home based startup”.  This was especially interesting to a lot of us because we aren’t quite sure how we might find employment, or immediate funding for a full time company.

The backstory is that the company cofounder Javier was worried about his long term job security, so he had a problem driving him forward, and he was passionate about tools.  In addition, his wife needed to be employed and pay more into the Spain retirement system.  The company began with a soft, low cost launch by opening an eBay store.  eBay provided not only a mechanism for reaching users for sales, it also allowed them to essentially use the auction site as an advertising platform.  They stayed focused on very specific products / niches, and offered sites for each of those products.  The key lesson for me here is to start small, reduce risk where you can, and focus on specific product niches.

Today is small, but growing ecommerce site.  Average sales are 1000 Euros a day, with essentially just two employees.  Because of their slow and steady growth approach and the lack of high amounts of initial investment required, this company has been profitable from year one.

Some keys to success:

  • Low TCO is a main target (my opinion: because they didn’t have huge investors backing them and were using their own money)
  • Outsourcing for all non customer related processes (my opinion: this allows you to have a lower staff and just focus on the things you believe are the most important to your business)
  • Use of their own capital – in this case they started with 40k Euros, mostly for inventory.  (my opinion: this allowed them to be able to focus on controlling their own destiny)
  • eBay offered/offers a nice entrance point into their store (my opinion: they can leverage off of the much larger eBay platform to reach an audience they wouldn’t reach otherwise)
  • Focused on customer service and close contact with their customers (my opinion: In particular with organic growth, you want word of mouth to be a key driver of your increasing sales.  In order for this to happen, you want happy customers.  Otherwise you end up having to spend a lot more time and money on your own advertising)
  • Software based on open source – Prestashop. (my opinion: the low up front costs and high degree of customizability associated with open source software can provide a nice boost, especially when you are starting up.)
  • Adjust business to their software. (my opinion:  this is typically good IT practice in general, but it is harder to drive competitive advantage if you are doing the same as everyone else.  In this case, it’s especially useful, however, because the company is small and not technology focused).
  • Visits from SEM (Google Adwords) and SEO, but lots of customers from word of mouth. (my opinion: They probably got more customers in the beginning from word of mouth, followed by eBay, then Google – and I expect as they grow in size this will be flipped in the opposite direction.  Word of mouth is so key with small businesses, as I learned during my time at a young internet service provider in the late ’90s.  We had a “invite 3, surf for free” where each person you got to sign up for internet access meant you would receive a third off your next month’s bill.  This was always cited as a key reason for our success in growing from 2000 to 30000 users in well under two years.)
  • Deliveries are fast! (my opinion: When customers get their products quickly, they are happier – leading to improved word of mouth).
  • Slow growth, more manageable. (my opinion: when you don’t have the time to focus on rapidly growing your business and the change that comes as a result, go with a slower more manageable method).
  • Chain of happy suppliers. (my opinion: When you are small and have little negotiating power, don’t make your suppliers unhappy.  Even better, happier suppliers means better performance from them – usually).

The value proposition:  Cheap, Fast, Guaranteed, Reachable, Secure

Also, they weren’t afraid to use ideas gained from other startups:

  • (an orange sales site) – Listen to customers (adopted easy payment methods).  Great customer experience in payment!
  •, eBay – once your site is big you can sell a lot, even if you don’t have the items in your physical possession.
  • – the box is important.  It protects your product and until the end of its lifetime, it wears your logo.  This is also a key practice that Apple focuses on “out of the box experience”.
  • British approach to selling tools: If you can pay, we can find the tools.
  • Selling products by knowing the customers.  By this they mean that they know as much as possible about their customers profile so they can suggest other products that they may like.
Explore posts in the same categories: IETechstartup

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