Ask HN: Real costs associated with a startup?
Particularly web stuff, but I'd be interested in hearing about hardware/desktop software, etc.
Were there any unexpected costs?
Were there any unexpected costs?
By far the biggest cost is opportunity cost, but that's also the least "real" in dollar terms. Two years that you spend working on your startup is two years of lost income (~$200K+ for decent software devs), or two years that could've been spent getting an MBA or grad degree, or two years when you're not partying and getting laid.
As for actual monetary costs - paying people to do things is the main one. Legal fees can rack up quickly if you want an actual corporation - easily a couple K for a barebones S-corp if you do it with decent lawyers. If you have employees - well, you know how much you could get paid, then increase that by 50-100% for overhead.
Software and hosting costs were essentially zero - for basically any web stuff, you want to be using free software anyway, and you can get cheap hosting for like $10/month ($80/month if you're doing something weird and need a dedicated server) that's perfectly adequate for trying ideas out. S3/EC2 also can result in really cheap hosting if you're not using much capacity. If you need to scale it'll cost you, but if you get that far you're doing so much better than 99% of startups that you'll welcome it.
Biggest unexpected costs for us, by far, were founder buyouts. My remaining cofounder and I each dropped a grand to buy out cofounders that weren't pulling their weight - and while it was totally the right choice from the POV of preserving the relationships (one of those bought out later led to 2 job leads for me when the startup folded), it would've been even better to not bring them on board to begin with. Be very careful who you start a company with, and make sure you each have the same level of commitment and goals for the company. Buyouts can be as expensive as divorce, and usually lead to the death of the company.
I would say if it's your first (or second) time starting a business there is an amazing amount of costly mistakes. You'll survive if you never make one big enough to put you out of business. We should collect stories about our biggest mistakes..
The big unanticipated cost for me is freelancers. When I started, I did everything myself, by hand. Turns out that most things are not worth my time. Freelancers are also a "spend money to make money" option for me these days, but I got a shock when I did my taxes last year and realized I had paid out the equivalent of about a month's salary on them.
[edit for context: one-man software business, 2.5 years old, produces roughly dayjob salary.]