cost $500,000 but sold for $70,000,000

September 5, 2006 at 10:09 pm Leave a comment

Start-up costs have plunged with the advent of free open-source software, a drop in bandwidth prices, more affordable Web development and cheaper hardware. A company can now be powered by $1,000 PCs instead of $10,000 server computers, as they were several years ago.

Even splashy marketing costs associated with the Internet bubble of the ’90s are gone. “This is frowned upon these days,” Dixon says.

About the only budgetary concern these days is labor costs. But companies can skirt that issue by outsourcing some jobs outside the exorbitant San Francisco Bay Area to another state or country.

“It’s cheaper to get things up and running,” says Chris Dixon, who sold his security-software start-up, SiteAdvisor, to McAfee for $70 million in April.

The company, which was purchased only 11 months after its creation, had spent a modest $500,000 on hardware and software by the time of its sale. Had he started SiteAdvisor a few years earlier, it would have cost at least 10 times as much, he says.


Entry filed under: Internet Startup.

They start so early Shoplifters Beware

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About Biz News

My Name is Bisi and this is my blog This blog features stories that I have read that I think are interesting . I usually bookmark the stories that I find interesting but they are getting too many . I have decided to catalog and share them on this site . I am not really promoting the site so you might have accidentally stumbled on it . Thanks for visiting .
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