Bootstrapping to Success!

Why starting with nothing can be best

Viv
Viv
Jul 25, 2017 · 4 min read

It is a tale of two startup visions — those bouncing from raise to raise and those bouncing from sale to sale.

Both have their place in our ecosystem but only one gets the airtime.

It has become decidedly sexy to speak of how much money a startup has raised. Techcrunch is filled with stories of successful rounds, investors laud those founders who raise buckets of cash and list after list after list praise those who raise their series E and F and G…

Rarely do we see lists praising bootstrapped business.

Until now… the zeitgeist is changing.

More and more entrepreneurs, and startup influencers, are starting to sing the praises of cracking a revenue model before doubling down on growth and fundraising.

Nail then scale, don’t scale then try figure out how to make it work.

Too many wonderfully impactful startups have flamed out through raising too much. Many VCs have written about this including Mark Suster, Sam Altman and others… too much too soon can sabotage sustainable growth, lead a founder to throw money at a problem instead of solving it and ultimately this might hurt at exit!

Be cautious when raising and if you decide to start with laying bootstrap foundations here are my big learns from the journey (so far!).

UNDERSTAND THE SALE

You survive the bootstrap journey by creating a business model that maximising revenue. Actual real life revenue comes from sales.

I believe with every fiber of my being that founders need to be willing, and able, to sell. The passion we have for what we do is the most authentic voice in the early days and by making “the ask” ourselves we learn the patter and tweak accordingly.

Being at the coal face of the sale also means understanding what clients (and potential clients) want and then aligning those wishes with our vision for our companies.

FOCUS ON CUSTOMER SERVICE

Keeping a customer, especially in a SaaS model, is worth its weight in gold. Not only does it create a recurring revenue stream but those clients will be both evangelists and research centres if they feel they are being looked after.

Regularly checking in with clients, going that extra mile and all those other cheesy and obvious customer commandments (so often overlooked “we’ll do it when we have time!”) will enable you to develop your offering, and expand the right features, based on users’ feedback. Great client relationships lead to referrals and super-valuable recommendations.

Never underestimate the value of satisfied customers, never take them for granted and never assume they are easy to please. But those who love you, who find working with you impactful, and your product delightful, will forgive those early bugs and glitches and will spread the word in a way no paid-for-campaign can. True believers will beat mercenaries every time.

MAKE EVERY DOLLAR COUNT

This is the big one. At Blackbullion we speak of every pound spent bringing five pounds of value. From the coffee (keeps the team buzzing and alert) to flowers that create a positive and colourful environment, to campaigns on campus and the right equipment for staff, watching the pennies (which doesn’t mean penny-pinching!) really is crucial to longevity.

Consider every purchase and spend what’s necessary - pick functional over posh. The number of times I have been handed 400gsm business cards by people who are just starting out. They believe it “sends the right message” but all I can think is “you don’t understand capital efficiency…”.

Don’t outsource jobs that you can do yourself. Often these are great learning experiences and nothing is impossible to learn. You’ll be amazed how fast you can iterate your learning and how valuable this is in the medium and long term.

When you have cash you will be able to outsource your accounting or content marketing or PR but until then become an amateur expert in every part of your business.

Saving on little things goes a long way and the longer you can hold on before needing to raise, or hitting profit, the better.

Being a founder is taxing emotionally, and physically exhausting. Bootstrapping can make the journey more difficult in the short term but countless companies praise it as a strategy. Atlassian, the Aussie behemoth, bootsrapped their way to $100m ARR, taking institutional funding just before they were due to IPO, proving that success is absolutely possible. And if you needed further proof of long term benefits the Atlassian founders held approx 67% of the shares at IPO meaning control was mostly in their hands all the way to exit!

Having too much funding can be fatal for your business just as much as having too little. Telling the difference is the difficult bit. Looking for investment takes a lot of time, and focus, away from growing your business. Be sure to seek it when you feel you have really nailed it and are ready to scale and scale fast, otherwise get your head down and crack it.

As Abraham Lincoln said “Give me six hours to chop down a tree and I will spend the first four sharpening the axe”

Good luck!

Viv

Written by

Viv

Founder/CEO @blackbullion | helping the world get #moneysmarter | author | speaker | flat whites | Reflecting on #financialeducation #womenintech #edtech

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