These series of guest posts are written by the teams attending the Tetuan Valley Startup School 2011 Fall edition. This post is written by the Referama team, formed by Alejandro Riera and Fernando Sáinz.

It’s been already some years for us dreaming and struggling to build a good startup and over this time we’ve changed our minds about what a great business model implies.

When you’ve got no money but you’ve got time and you’re good at learning by yourself you feel that you have a great opportunity to jump right in and launch your own startup without worrying about how successful or profitable it might be.

That’s a fantastic starting point. Then, you set your mind and you put yourself on the path of releasing early releasing often. This gives you the freedom to experiment and iterate at your own pace, trusting you’ll find a way to better server your users. Business Plans are hypothetical and time consuming, let’s focus on making something great and figure the business model later.



- Ah, so you are a researcher? That's cool. What do you want to find? - Cash



After some time working hard you decide (or need) to make your first business plan (BP) and it’s a very interesting, frustating and surrealistic experience. People know that specially for startups BP’s are “numerology”, you summon your powers of foreseeing and command your spreadsheet to evolve your sad looking numbers to money making beasts. It would be actually fun if you didn’t have to face some cryptical and extremely boring terminology, and market data were not that hard to find.

Once you’ve finished and you’re amazed about how much -crap and fantasy- intuition you applied in some chapters, you see that you’ve slightly changed your mind. Now you’re a little worried that you might not get to those numbers. 300.000 users, or maybe 80.000, or maybe 10,… In that moment you want to know whether you can actually afford what you’re doing. You want to trust in your fictitious plan. And you wat to find out in which point it makes at least a sustainable business.

Two years ago we had a great experience in Bordeaux, France, working in the Pepinier d’Enterprise UNITEC. We could write a book about it (startup + Erasmus, you know what we’re talking about, Philip ; ) We met some wonderful people like Oliver Fry, who among many things told us to consider the opportunity cost. Even if you can afford a good level of uncertainty, wouldn’t you like to know that the 2-3 years that you might end up devoting to your project will come to a good end? Wouldn’t you like to know that you are not losing the opportunity to do another crazy great project that might have better chances of success?

We put two years of our lives into wolty, our previous startup, which we loved and we are eager to improve whenever we can, but which still required lots and lots of work to (maybe) become profitable. The Tetuan Valley crew have helped us to clarify ourselves. They have always encouraged us to pursue whatever crazy thing we had in our head, but also to find the connexion between those ideas and what customers will be willing to pay for.

We saw that if we wanted to make a living out doing what we liked the most, we needed better numbers, and we started Referama full of excitement and with better perspectives.

Looking for money is not something dirty, nor it should be an annoyance in your plans (hell, we’d like to never need money, we are open to lifetime donations). If your project starts as a hobby, perfect, but if you want to completely commit on what you wish to do, you’ve got to find a way to support it.

The best thing about building something out of an idea is to see how it reaches other people and how they like it. Getting people to use your free website is hard. To build something so useful that people is willing to pay for, is absolutely wonderful.

We are tired of seeing good ideas ending up in the trash. People get you excited with projects that you would like to have already available. In this TVSS edition there are plenty of ideas and projects that could improve our lives and we want them to succeed. There’s too many projects that would improve the world only if they had the resources. Please find the way to get the money to make them happen. Please, make them profitable.