You can read a lot more about our design process on our old blog ( http://heavyink.com/blog/ ), but the short version is:
1) come up with basic idea for website
2) put up a survey
3) ping comic bloggers; get 400 people to take survey
4) narrow down feature list
5) get a UI consultant to help us design how the features get spread across the various pages (lots of "scenario" stuff: "say that you're a young woman shopping for manga. What do you type? Where do you click?").
6) hand the "wireframes" from the UI consultant off to our graphic designer
7) review the sketches; decide to pick a new graphic designer
8) get sketches back from second graphic designer; tell him "No, make the color scheme more like Netflix". Repeat this last step in 100 different steps: feedback on size of elements, etc. The engineering team provided the feedback, the graphic designer provided the expertise with fonts, layout, etc.
9) done!
...well, actually, nothing is every done. We've got to revamp the tabbed navigation, the RSS customization buttons, and a ton of other stuff...but it was well enough done to go live!
All of the salaries, rent, startup inventory, consultant fees, trademark fees, legal fees, etc. for HeavyInk were payed for by profits from SmartFlix.
That said, SmartFlix itself has debt. Why? Because it's really capital intensive. If a given DVD rents out once every 60 days, and we make $4 in profit on a rental, and the DVD costs $60, then an upfront investment of $60 breaks even two years later. So: SmartFlix has incurred a bit of debt (half of it real debt owed to banks and other small lendors, and half of it paper debt, in the form of promissory notes to engineers who were on half salary for six months, etc.).
The capital intensive nature of SmartFlix was fine, but it means that it's hard to grow past a certain size - in the absence of VCs rushing to give us $1 or $5 million (and, frankly, they're right not to - SmartFlix isn't going to have the return that they're looking for), then growth slows to the rate at which we can purchase inventory with profits.
...which is one of the reasons that we looked for a second startup idea that leveraged a lot of our core competencies (ecommerce, fulfillment, datamining, etc.) but did not require nearly as much cash tied up in inventory.
You can read a lot more about our design process on our old blog ( http://heavyink.com/blog/ ), but the short version is:
1) come up with basic idea for website 2) put up a survey 3) ping comic bloggers; get 400 people to take survey 4) narrow down feature list 5) get a UI consultant to help us design how the features get spread across the various pages (lots of "scenario" stuff: "say that you're a young woman shopping for manga. What do you type? Where do you click?"). 6) hand the "wireframes" from the UI consultant off to our graphic designer 7) review the sketches; decide to pick a new graphic designer 8) get sketches back from second graphic designer; tell him "No, make the color scheme more like Netflix". Repeat this last step in 100 different steps: feedback on size of elements, etc. The engineering team provided the feedback, the graphic designer provided the expertise with fonts, layout, etc. 9) done!
...well, actually, nothing is every done. We've got to revamp the tabbed navigation, the RSS customization buttons, and a ton of other stuff...but it was well enough done to go live!