In the world of bootstrapping there is an expression, “Use ‘best-for-need’ rather than ‘best-of-breed’ products (or services).” Originally, Best of Breed was the title given to a show dog that was judged to be the best representative of its breed. Today it’s a common buzzword that describes a product that is claimed to be the best in its category (either by the company itself or when reviewed by experts). In contrast, Best for Need means choosing a product or tool that may not be the top of the line, but is “good enough” to get the job done.
Today small businesses, start-ups and entrepreneurs are often forced to cut expenses wherever possible and frequently this means purchasing things that are Less-Than-The-Best. Or “worse yet,” settling for options that are free — and despite how much we like getting stuff for nothing, there is often a little voice that says “if it’s free, could it really be any good?” or “okay, now what are they going to try to sell me?”
Using the “Freemium” business model, companies are giving away high quality versions of their products and services (typically a digital offering such as software, media, games or web services) and only charge a fee (or premium) when users purchase advanced features, functionality or virtual goods.
If you do not need any premium features, then you are literally getting what is best for your needs for FREE but it is important to know that not all “Freemiums” are created equal (or are really free).
True Freemium – A company offers a version of its product or service for free and charges for other versions. To be considered “freemium” rather than just something that is free it has to have value separate and apart from the paid version.
Free Product for a Cross Subsidy – A company offers you one product at no cost but charges for complementary products. This model works because companies believe you will have a good experience with their free item and when you need other related things, you will look to them first. This is different from true Freemium because in most cases, the “free” item is not enough and you will need other things to get the job done.
Time Based Free Trial – This model of free is pretty self explanatory but there are different kinds of free trials. There are some that allow you to produce actual “end-products” during the free trial and others that only give you the ability to “get a feel” for the service.
Considering offering products/services for free? Read The Complete Guide To Freemium Business Models
Based upon your needs, there may be times when free may not be the optimal solution — but that doesn’t mean that you need to “go for the whole enchilada” with a program that has all the bells and whistles. It is often hard to resist the temptation of choosing a product or service because you might “one day” need one of its advanced features. While it may seem to make sense to prepare for the future (thinking that in the long run you will save money), when you are on a budget, the money you spend now could be better used on things that will help you immediately increase your ROI. Select companies with flexible pricing plans that offer scalability — allowing you to grow into advanced features as you need them.
Word of Caution: If you need a variety of services or business solutions, going for different individual vendors may not always be the best choice (even if it costs less). In some cases, choosing a comprehensive solution with several services under one umbrella may be more expensive, but the convenience of having everything all in one place (and connected) may be more efficient, ultimately saving you money in terms of productivity.
When it comes to selecting technology, such as computers and office equipment, buy used items to get you through the start-up or “tough times” phase. Just think about how exciting it will be when your business is doing better financially to be able to go out and buy the latest model without any regrets. A good place to start looking is your neighborhood repair stores — since they are local, they are invested in building a relationship of trust which is important when you are purchasing previously owned computers and equipment. Depending upon your business, you may be able to work out a barter exchange!
If you have a project that requires an outside contractor, consultant or expert, see if it can be broken into separate tasks. Most likely you will find that there are some things that don’t require you to hire the “Best.” There may be tasks that you may want to “outsource” or can hire a student/intern to do. Ask yourself these questions:
Are there any parts of the job that you can do? For example, for your website, if you can write the site content yourself or use your own pictures (instead of paying for stock photos), this will mean less that you have to pay to get the job done. You may even considering trying one of the DIY website building programs to get your site started and then consult with an “expert” for advice on perfecting and marketing it.
Are there things that you can do before hiring? If you are having someone else design your website, have a list of sites that you like ready to show the designer. Having your receipts and financial records organized before giving them to your accountant at tax time can lower your final bill. You could even use one of the free financial apps available to help.
Are there tasks that can be done by a person with “less” expertise? Sometimes it makes sense to hire different contractors to complete a project rather than one person who can do it all (but charges more because of expertise). For instance, rather than hiring one person to handle all of your social media, break it down by task — such as writing blog content, getting general “likes,” status updates, and generating targeted traffic — each of which requires a different skill set (and can be paid at different rates).
Jugaad is a Hindi word that loosely translates as “the gutsy art of overcoming harsh constraints by improvising an effective solution using limited resources.” It is used to describe something that’s a mix of creativity, innovation and cleverness. The word can be used as either an adjective or a noun. You can have a “jugaad” mindset for solving a problem, a product could be developed using “jugaad” inventiveness or something can be a “jugaad” (ex. in India, modes of transportation that are built from pieces of different vehicles).
This approach to problem-solving has recently gained attention in Western Culture because of the book Jugaad Innovation. The principles and practices of the jugaad mindset are becoming globally relevant for businesses who want to grow in an increasingly complex and resource-constrained business environment.
Stay tuned for upcoming article which will further explore ways to effectively utilize jugaad and frugal innovation within the small business setting. In the meantime, here’s some background to get you started: Jugaad Innovation: Is Your Startup Doing It?