This week was all about money for me. We were prepping our presentation to an angel investor/VC to practice for our final pitch. My task was to reevaluate our financial projections based on our modified concept. I had to research the cost of a contract attorney and a contract accountant. I discovered LegalZoom.com where we can order business contracts and other common legal documents for set fees or subscribe to advice for a monthly cost. This made me think about how we might set up the model for our own resource library. Figuring out the cost of an attorney specifically was difficult because although it’s easy to find out average hourly costs, it is very difficult to estimate the amount of time needed for the different tasks we need done. So even though I know that I need to plan for $200-$300/hour, I have no idea how many hours I am going to need one. The same goes for figuring out the cost of an accountant and bookkeeper.
Then, I had to adjust all of our operating costs and burn rate to account for not working out of a physical location for our primary task of consulting clients., and including the other members of our team. This meant we could start off in a much less expensive collaborative space like WeWork, as opposed to leasing our own office space. This saves us a considerable amount of overhead costs; literally a difference between $8,000 to $3,500/month.
This was also a time to really work on the business model. We have to really consider how long it will take us to do projects, so that we know how much our rate needs to be in order to remain profitable. We can’t just say that we are more affordable than other consultancies when we don’t really understand our revenue and the viability of our business. I worked with Will on this part, and it is a difficult equation because there are still a lot of unknowns.
The one unrelated task I had this week was another validation interview. I spoke with Ryan Shafer most recently from Viacom. He led a 20 person design team, and had incredibly validating experiences related to our concept. It made me rethink our decision to only focus on startups if teams like his can use the help of a team like ours so badly.