In today’s Oregonian, Mike Rogoway’s article “Tech entrepreneurs defy recession“  quotes me as being able to build the first version of MioWorks.com for $5,000.  Well this is very true but may be a little misleading so let me explain how this can be.

The team behind MioWorks is not just me.  There are three other founders that have dedicated every extra waking moment to building the application over the past several months.  Of this team two are technical mavens and two are business guys.

So where does the $5k come into play. There are three aspects where we spent money directly on the application: design, hosting & legal.

On the design side we needed someone who could take our ideas and turn them into an interface that met our needs.  We wanted simple, easy to use and easy to understand interfaces.  We knew that if the programmers did the design everything would look like forms that run on 3270’s (ok - those are old school terminals for you youngins).  We took our general ideas and worked with a Graphic Designer who was able to bring our vision alive.

In addition to paying for a designer we also had to pay for the environment to build, test and host the MioWorks.com application. Since I had extensive experience with this environment in a previous life, we decided to use Amazon Web Services (AWS) as our hosting provider.  AWS provides us with some rather amazing capabilities that we use on a pay per use basis.  Instead of buying a bunch of servers or renting servers in a data center, we are able to use what we need and pay an hourly fee.  No setup costs, no commitments, no big bill to get started.  This is a huge advantage to a start-up.

I remember back a few years when I was working for another web start-up company.  I think we spent over $100,000 on servers and rack space at a tier 1 data center before we were able to even launch our first commercial version.  At MioWorks.com we have an enterprise quality production environment with hot standby replacements, up to the minute backups, two layers of data storage and an environment that can handle 10,000 customers.  All for less than a thousand dollars a month.

The last place we had to spend money before we could launch our very first version was on legal advice.  Terms of use, privacy policies and refund policies all needed to be reviewed by a expert.

So that’s how you can build an application & enter beta testing for $5,000.  If you are looking to build your own web based application, start by assembling the right team.  As with most projects, the bulk of expense is in the brainpower that it takes to create the solution.  Partner up with big brains and you’ll be able to get an idea out the door for an investment in time and energy over an investment in large sums of cash.