What does bootstrapping your business mean? Is it for you?
Wikipedia defines bootstrapping as “startup (an Internet-based business or other enterprises) with minimal financial resources.” And it’s a fairly accurate description. But how do you actually bootstrap a start-up business? You begin where you are and you raise your company from the ground up without external help. This doesn’t mean that you start with minimal capital though, you could have some resources and cash available in the beginning but the aim is to be able to release your project with the most efficient way, with the minimum amount of resources. It’s not just an exercise for you, it’s an exercise for your company’s growth.
The philosophy behind bootstrapping
To explain in simple words how bootstrapping a business works, it forces you to find alternatives to expensive tools; alternatives to easy, yet expensive, solutions to problems that arise. This exercise, in the beginning, will tremendously help your company’s growth.
Being able to, not just overcome, an obstacle but find an efficient way to do so, is the perfect mentality to everyday problems that your company should face. Trying to cut unwanted expenses might help just a bit in the beginning but in the long run, it can be a differentiator on the success of your company.
Most startups start from day-one by doing the opposite; They create business plans trying to find what they’re missing and what capital needs to be raised to create a problem, by just creating another one for them!
Bootstrapping your business is all about efficiency and, especially in the beginning, it’s all that matters. When funds are limited, you’ll have to take the first step fast, release your startup, get feedback, try to get results fast. And by doing that, you’re ahead of most of the competition like startups that try to become perfect by adding one more feature, even solve one more bug till they go beta.
The problem with this approach is, that the more you wait the more you end up fearing the release of your product. You also get increasingly prone to be affected by criticism, opinions, and scepticism from your friends and peers.
Other than releasing early and being dependent on your own resources, most people forget the most important point:
Owning your full business!
And I can’t stress it enough. From the sense of accomplishment in owning 100% of your company – being able to distribute equity to the first fools that believed in you and your dreams, to be able to raise capital when needed to grow exponentially and not just to begin creating your product.
Focusing on profitability from day 0
It often happens in many startups, especially during the building phase. We tend to want everything in our service or application to be perfect, without bugs, every feature possible and flawless. But it shouldn’t be that way. You should try and ship early, no matter the cost. Release a beta, gather feedback, evolve and release your product. And this while bootstrapping is unavoidable; you can’t just wait forever without any form of revenue. You have to create a proper business, one that has expenses but also revenues.
Getting funding especially before the release of your product is the number one reason to stall everything, to rethink things that, up until now, seemed obvious. Now the stakes are higher, you’re more stressed, and that’s something normal.
You have to be better, creative and smart
On the same note, you don’t have the luxury to be relaxed; you have to work harder, achieve more in less time and be as productive as possible. While bootstrapping, it’s always “now or never” and pushing yourself harder to create something better. Evolution can only work to your advantage.
When you bootstrap your company, you can’t always afford all the shiny new toys. For example, expensive servers, marketing automation tools and all the bells and whistles you’d want to add to your product. This forces you to find open-source alternatives. In general, try to find creative ways to accomplish your end-goal without spending money (at least, not a lot).
Doing this, you will be able to create a company out of your idea that respects money and has cost-effectiveness always in mind.
I’m sure you can find many more reasons why you should or shouldn’t bootstrap. However, one thing is for sure. It will make you a better business person, better at decision making and a better entrepreneur. Of course, you may not want to take the risk with your great idea, your baby or anything else you call your project. So, why don’t you start something as a side project and try to bootstrap it? It will surely be a great journey!