More proof of the much cheaper cost of launching new companies (or technology projects) as I wrote last week here.
The WSJ (subscription required) runs an article on how newer entrepreneurs feel they do not need VCs. The article cites the Flickr example:
"Consider Flickr, the innovative online-photo service launched by a small Canadian company early last year. Like many Web start-ups today, it was built on a dime: Husband-and-wife founders Stewart Butterfield and Caterina Fake used cheap software to construct the Flickr site, eschewing pricey computers. Some gear, such as computer storage, was "about 100 times cheaper" than it would have been even five years ago, says Mr. Butterfield. It cost only about $200,000 to pay salaries and get the site up and running, he says"
Personally, I think this gets tech funding back to a rational basis. Get initial funding from angels and early customers. But I would still go for expansion capital and advice from VCs. I should have followed that path in 1999.
But 2 takeaways from this. More CIOs should be funding their own "tiger teams". The larger vendors are definitely killing the golden goose given these new economics.
