> We committed to working a year without salary.

Sounds interesting. Not many of us could do that w/o previous success(s).

> We started in one person's apartment with the understanding we'd get an office in six months. Six months became a year, a year became 18 months, five people became six people...and the guy living there finally said, "Obviously, you guys are not leaving my apartment, so I am." That let us turn the bedroom into our conference room.

Haha, thats hilarious. I wonder how much more productive it would have been to have a more comfortable situation?

EDIT: Care to share why the downvote?

I ran a 3-founder startup from my apartment for a year before we got an office and I wouldn't recommend it. Because it's your office, you feel that you must be working at all times, and it leads to burnout. We did become more productive after we'd moved.

We ran a 4-5 person startup from our apartment (and had the servers running in the closet) for a year before we got free office space. I had a different experience where we worked longer and faster when we were all in the same room (my roommate and I slept in the back, which was our area and no one could touch). Once we got a little larger and had reasonable funding, we moved out and got a really nice office with the money we'd saved for a year.

From the comfy world of home and car owners it sounds like an expensive proposition, but in reality it's a lot cheaper than a year of college and most of us paid for at least a few of those. You just have to really believe in your cause because there's no magic paper at the end that says the learning you did along the way was worthwhile.

Not sure I agree. I didnt spend 100K for one year of college. I spent more like 15K for four years.

With wife, 3 kids, house etc, taking no salary for year is frankly pretty impossible.

Not sure why I am getting downvoted here? I am voicing my perspective.

Well, assuming you weren't working during those four years, you actually had negative income, rather than no income.

Though of course if you have dependents it's different. Could be either harder, if you are the main money earner, or easier, if your wife makes enough that you can stop getting salary without sacrificing much.

You got a low-cost education not available everywhere in the world at this time

I got an AA degree from Cabrillo College in 2003 for $2000 and then spent only 18 months at UC Berkeley and graduated from there with a BA degree in late 2004. Sure the cost has gone up since then but still..

Vanderbilt paid me to get my Masters.

You need to be careful with using residential property for commercial purposes in most places. Repurposing a property, even though it would require no external changes and no structural internal changes, often requires planning permission and/or a correct license to operate a business. There are exceptions for sole traders, but they'd not count in this case.

Caveat: I'm in the UK. Things may be different the other side of the pond (and may vary by state).

Somehow, I don't like the idea of the government telling me how I may use a property I pay good money for, especially if there are no changes and it's just me with a laptop.

Too many laws in too many places. [I know I won't consider the UK now :->]

EDIT: I have heard about this zoning concept, it's just a bad idea IMHO, especially when applied to the modern tech workers. In France, unless you run specific equipment (say heavy machinery) which can create nuisance or risk for the neighbours, or if receive the public (wear and tear being a nuisance in itself), you're quite free. Zoning as in simcity (residential/industry/commercial) is a dated concept. I want to leave near the place I work and where I can find commerces.

In France, there are even special corporate statuses for single entrepreneurs, which especially allow you to do that in case your landlord may tick, and even deduct part of your home expanses as business expanses (say if you are using a room of your 4 bedroom flat, 15% would be reasonable because you'll still use the bathroom and the kitchen more for yourself that for your company, the % amount is left to the appreciation of the tax agents)

That's one of the rare business friendly laws, even if I must say I've been quite surprised by the recent Hollande plan, which for the first time seems to talk sense about business and employment.

The way you use a property affects all properties around it - that's why zoning exists.

Hardly true for any form of knowledge worker. A guy sitting at a desk for twelve hours is unlikely to create nuisance for neighbours

This example was 6 people in one person's residence.

No one complains if you don't cause problems. If you create a nuisance, people complain, and then you get fined/evicted based on the cause of the nuisance, the zoning violation.

6 people in an apartment sized for 4 may be a nuisance.

"Commercial" activity generally refers to customer traffic, not personal work.

In my experience, the thing most likely to cause a problem is going to be the building's management - whether its an apartment, condo, or co-op. With a 2 or 3 low profile people you'll be ok, but good luck trying to get away with actual employees coming in and out all day.

I'm sure things vary by state, but I think if you're careful, it's something you can easily get away with.

As long as you don't need to have frequent visitors, aren't making tons of noise, and generally make it look like your apartment isn't a makeshift office, I'd probably be more worried about my landlord finding out than the zoning commission.

Is commercial office space substantially more expensive than residential? I could see using a space you're living in as an office, but if the original tenant moved out because the office was infringing on his space/life, is it cheaper to maintain the residential apartment as an office or find proper office space?

id software used an apartment at one point and was started in a lake house. I think it helped that a lot of the staff actually lived there.

http://romero.smugmug.com/Video-Games/The-Archives/480_GtbLP...

The rag-tag office setup is pretty inspiring.

Yup, this was happening in Kendall Sq in Cambridge for awhile until the city quietly asked everyone to move - http://www.boston.com/business/technology/innoeco/2012/04/2_...

2 bd w/ living room apartments were cheaper than office space across the street.

> Not many of us could that w/o previous success(s).

Or other outside support (parents, spouse).

I think this is a key takeaway:

"Most entrepreneurs think of the VC as their customer, but when your survival is based on the VC, you build a company on what the VC will like and not what your real customers like."

A VC-backed business often has the wrong priorities from the get go, which is why bootstrapping is really attractive because you live and die by building a product people want to use.

"We started drive farming--buying external drives from retail stores, cracking open the cases, and placing the drives in our servers."

As a bootstrap lover, this is awesome even though critics can question this especially since they are a backup company.

They mention in a blog post that they don't buy enough drives to order directly from the manufacturers, much less at a discount. They had to do some pretty interesting things during the Thailand floods.

You missed the point of the OP's post - the company sells a backup service, which means losing a customer's data is a very bad thing. Breaking open retail external drives and moving those hard-drives into a server is not something that inspires confidence in their ability to actually keep the data safe.

The OP's point was a confidence issue, and not necessarily that there was a better option that could have been taken.

The pods have internal redundancy, and your data is stored on more than one pod, so I'm okay with them using consumer hardware to back my data up. They also wouldn't be doing it if they weren't sure that the drives were reliable enough for that use.

That's one of my favorite uses of probability: if you know what you are doing, you can build extremely reliable systems out of unreliable components.

Even the best hard drives will fail eventually, so you need a redundant failure-recovery system anyway. And once you have that, using commodity hard drives shouldn't be a problem.

$10 million/year in revenue in the 6th year doesn't sound like a VC-compatible growth rate.

> $10 million/year in revenue in the 6th year doesn't sound like a VC-compatible growth rate.

Interesting point. Come to think of it, online backup services have existed for a long time, I remember using a similar service at a previous job 6+ years ago. I recall that it was quite expensive and certainly not unlimited. I seems clear that Backblaze was able to get to $10 million revenue by competing on price - dirt cheap pricing. And the dirt cheap pricing was made possible by not paying salaries, running a "data center" in an employee's apartment, building servers from ultra low cost hardware components, violating residential zoning laws, oversubscribing storage capacity, etc. One can only wonder what kind of sacrifices were made in terms of physical and network security. I wonder how many of their first customers realized that their backups were sitting in someone's apartment ... somehow I doubt it was disclosed at the time?

The problem with this kind of business model is that it is effectively a small business owner mindset. $10 million revenue after 6 years of toiling away ... at $5 per month, this means that they have something like 2 million users ... considering all the other backup solutions available (including far more secure solutions), it seems quite possible that their growth will stall or slow down as their target market is going to be relatively small and already saturated and you can't go much lower than $5 a month to continue competing on price alone. Incidentally, I noticed that their website actually says "as low as $3.96 per month" ... so they are continuing to push the limit on price. I'm not sure that a price war / race to zero is the optimal strategy for this business ... this is like trying market the world's cheapest helmet or life vest - how many people would seriously want that?

FWIW, the $10 million number is annual revenue. So they'd only need about 170k users at $5/mo ($60/year) to be making that much.

Doh. That's true. My mistake. I suppose 170k leaves a lot of room for more users.

Wasn't that the point of the article?