2 builders who never spoke to each other

Let the prepayment fund the build

Cap what you will spend of your own money, then raise the rest from the people who want the thing by billing a block of months before it ships. Prepaid subscriptions and early access seats turn the launch from a gamble into a funded project, and they work for recurring products as well as one off ones. Incentivise the longer terms so buyers choose them.

The method

1. 01

   Raise the opening budget by pre-selling subscriptions to the people you already gathered, and attach an incentive to the longer prepayment terms so they choose them.

2. 02

   Pre-sell to cover your costs before you incur them, so the launch stops being a gamble.

3. 03

   Cap the money you will put in so paying customers have to fund the build, and cap your hours so the project stays focused.

4. 04

   Bill three months up front so the preorders fund the build, and accept that multi-month prepay confuses people on the purchase page.

5. 05

   Preorders can put you a meaningful way toward a recurring-revenue goal before the product even exists.

What it returned

• $4,000

  Indy Hall let members prepay as much as six months up front with incentives and took in roughly $4,000, which Hillman matched with $10,000 of his own for an opening budget of about $14,000.

• 1998

  In 1998, aged 17, Justin and his friend Adrian ran an event in a town of 7,000 on a budget of $1,232.48; 200 tickets at $8 covered it, and they sold all 200 in advance within a few weeks.

• $5,000

  $5,000 of his own money for the whole project and a limit of 20 hours a week

• $2,916

  $2,916 collected across 19 preorders, a 50% increase on his original $5,000 development and marketing budget

Sources

• How Much Does It Cost To Start A Coworking SpaceAlex Hillman · dangerouslyawesome.com · 2) How much does it cost to open a coworking space · 2012-01-01
• Bootstrapper's paradoxJustin Jackson · justinjackson.ca · SaaS launch example · undated
• What raves and software have in commonJustin Jackson · justinjackson.ca · In grade 12, I put on a rave in my hometown · undated
• Can preorders work for software-as-a-service companies?Nathan Barry · nathanbarry.com · Will it work? · 2013-02-25
• Starting The Web App Challenge: From Zero to $5,000/month In 6 MonthsNathan Barry · nathanbarry.com · The Web App Challenge · 2012-12-31