What I learned from bootstrapping my company to a multimillion dollar business
It’s fashionable for startups to get their status and feel of succes by the amount of money they raised. At Iamb&b we wanted to do things differently and we decided to bootstrap. That decision thought me a lot about running a business and I’m very happy that we didn’t get investors when we didn’t really need them.
What we’ve learned from bootstrapping
1. When you don’t have a lot of cash, you have to make it, quick
When you are cash strapped you don’t have time to loose. You need to make money to pay rent and salaries. This seems like an open door, but it forces you to be creative with the resources that you have and it motivated us to get revenue quickly. This helped us to become cash positive in just 2 months.
2. Money makes lazy
It’s comfortable to sleep on a pile of cash, but harder to spend it wisely. With a great cash reserve it’s tempting to go for the easy route. Before you know you’ve spend your cash on fancy offices, too much co workers or marketing to boost your acquisition figures only to find out that it’s not sustainable growth. It’s better to be a bit hungry than to be obese.
3. Before you run, walk
When you receive the bag of vc money it is tempting to start running. Your investor might even require you to do so. But often it is better to walk first, learn how to place your feet and determine in what direction you want to go.
Once you determined where you want to go, and you have an idea how to get there you can speed up. When you are bootstrapped this is a natural way and it will make your company viable from the start.
4. It’s nice to have full control of your company
For our company it was crucial to keep control of the company in the early days and it was a huge benefit that we didn’t have please other stakeholders than our colleagues and customers. We were able to build the company the way we believed would be a succes. That gave iamb&b a strong foundation and competitive advantage over some of our competitors. It’s also nice to have a simple cap table when you try to raise growth money in later stages.
5. It is hard to bootstrap
It is not easy to bootstrap, you have to put in the extra hours. You will earn a lot less than your early employees, but you can grow your company the way you think is right, you’re forced to be creative, and to be successful. And last but not least you can make mistakes since your mistakes won’t be very big it is easier to fix your mistakes since you didn’t spend a lot of money on them.
When you’ve build your sustainable business and you know how to scale you will have a clean cap table and you’re ready for investors to accelerate your succes!