The Army captain had seen soldiers hit with shrapnel, their whole faces scarred and torn, except for two clean patches around the eyes where the military-grade glasses had been.
The sight gave Childs, an avid rock climber, an idea: start a business making stylish glasses with military-grade protection -- something that could be worn climbing a cliff, skiing down a mountainside, or just walking down the street. He knew the idea had potential. But getting the business off the ground wouldn't be easy.
Yet within a year, after working part time on the business as a soldier in Afghanistan and then back in the U.S., Childs had a finished product and a business. He also had a manufacturer in Taiwan, an e-commerce website, and access to a warehouse that could ship his orders anywhere in the world. Total cost? $3,500.
Across the country, thousands of small businesses are getting off the ground with minimal investment. Many use traditional cost-cutting measures -- sharing office space, buying furniture and computer equipment wholesale, hiring temp workers -- but many others turn to the Internet. Using a suite of cheap online services, these companies can now essentially outsource their entire staff.
As Childs says, for smart companies the financial risk is "almost nonexistent."
These services aren't all new. In 2005 in Las Vegas, Valerie Johnson was in a similar situation. She had a product -- adult sleepwear that she called "big feet pajamas" -- and about $50,000 of her own money to invest. The only problem?
"Textiles were not my forte," Johnson says.
To put it another way, she needed a manufacturer. So Johnson logged on to Alibaba.com, the Chinese e-commerce website that connects suppliers and buyers from around the world. She quickly found nearly 300 textile manufacturers in China. After narrowing the list down to three, she jumped on a plane to China with samples in tow. By the time she got on the plane home, she'd already chosen a manufacturer.
Using her connections and background in PR, Johnson got a lot of press and customer leads even before her product launch. She outsourced the design of her website to a designer she found on Guru.com, a kind of online marketplace for freelancers.
Shortly after two big trucks delivered her product outside her door, the orders started pouring in. Within two weeks she knew she needed her own warehouse. Her $50,000 investment had turned into a $2 million-a-year business, without Johnson incurring a dime of debt.
Would she have been able be so successful so fast 10 years ago? "Never," Johnson says.
But that's only the beginning. Savvy startups outsource everything they can. Childs sends his legal documents to Legalzoom.com. For Web programming, he heads to oDesk or eLance, where freelancers from around the world bid on projects. Other routine daily tasks, from marketing to copywriting, go through AskSunday.com, a virtual personal assistant company with offices in Hyderabad, India.
Childs's website is run by Shopify, a Web-hosting service with robust e-commerce options. When a customer wants to buy Childs's product, the order transfers from Shopify to warehouses run by Shipwire, a warehouse outsourcer that stores and then ships products anywhere in the world.
Childs never has to see his product or deal with employees. He works from home. The business can also scale, with fixed costs so low they can "come out of pocket," Childs says. "For someone to enter the marketplace on any product is completely different than it used to be just a few years ago," he concludes.
Inexpensive online alternatives aren't just about day-to-day business fundamentals. Social media is changing how -- and how cheaply -- companies can market their products.
Much like Johnson and Childs, Jared Madsen outsourced his bicycle company's manufacturing to East Asia. Madsen had spent years as a consultant for companies doing business in China, so he used those connections to find a manufacturer in Taiwan. To save on Web costs, Madsen used Shopify to handle his e-commerce.
But to really get Madsen Cycles off the ground, Madsen teamed up with Carson McComas, an Internet marketing consultant. They decided to selectively target niche audiences that they knew would be interested in Madsen's unique bikes.
"If you want to carpet bomb the earth and you've got the money to do that, that's fine," McComas says, referring to old-school radio and TV ads. "But that's not the way the world is anymore. The beauty of the Internet is that you find your niche and target it."
Madsen's niche is eco-conscious moms. He and McComas contacted prominent bloggers in that space and sent them free bikes. The positive word-of-mouth brought more traffic, better Google search results, and a free platform for developing customer relationships.
To ramp up interest even more, the two decided to run a contest. The rules were simple: Add a link to MadsenCycles.com on your site, and be entered to win a free bike.
The traffic results were "dramatic," McComas says. The company already had so much positive attention online that it was like "throwing a match" on a pile of tinder, he explains.
While hiring an online marketing consultant will cost you, the tools they use are free. Anyone can send out product samples, start a contest, or use Twitter and Facebook.
"There's a community out there having a conversation about your niche," says McComas. "You can participate in it and benefit from it, or not."
Though companies can outsource almost all their staff, many startups still keep at least some things close to home. That can be essential to making sure your company delivers on its promises to customers. Madsen and Johnson run their own warehouses, for example, although Johnson says she has considered switching to a warehouse outsourcer like Shipwire. (She already uses a similar service for her U.K. orders.)
"I'm a little bit of a control freak and really customer-service focused," Johnson says. "If I were to outsource that, I wouldn't have my finger on the pulse."
By Kevin Morris
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