Reflections on … The Secret to Running a Bootstrapped Startup
I am the person most likely to know how to make a dollar out of fifteen cents. Thirteen years ago, I started and grew my first business with a dream (an idea), less than $2,000 in startup funds, a computer science degree and strong relationships with my target clients.
To date, the most impactful moment in my career as a technology entrepreneur was not due to overcoming technical or financial challenges; it was one that required that I talked to strangers. My most recent startup began as a small grant-funded project that required that pre-MVP (minimum viable product), we interviewed at least 100 prospective customers NOT sell our idea, but to learn more about them, their daily life challenges and ultimately how we could build something that solved their biggest pain points. Through the prior experience of running bootstrapped startups, I immediately recognized this process as an invaluable method for reducing long-term operational costs.
When it is Head vs. Heart, The Heart Wins
I’ve been fortunate to work in the technology industry for over 20 years. I’ve spent half of that time as a corporate employee and the other half as a serial entrepreneur. I’m in a transitional moment in my career where I am compelled to reflect on what works and what doesn’t work. In reflecting, I have realized that first half of my career was spent trying to master tech and the most recent half learning to master people. What I’ve learned over the past two decades is that my most successful projects are those that allowed ample time for thinking, learning and engaging than time spent executing, building and reacting. Intimate knowledge of your target audience is critically important. To gain intimate knowledge, you must be willing to become vulnerable to getting to know your audience and be open to learning that your idea is flawed (i.e. your idea sucks).
The Hidden Tax of Innovation
I believe that many bootstrapped startups fail due to the “hidden tax of innovation” paid upon launching and managing businesses based on unproven assumptions and a wish to raise funding to pay for the execution of that untested idea. If you’re able to raise funds, at most you’ve bought some time to learn whether your idea works. However, you can’t purchase an exemption from learning if your business model sucks. Money won’t fix a bad business model.
Most of us do not possess the financial resources or time to execute ideas that won’t work. There’s an alternative. Minimize the cost of executing by spending more time learning.
Identifying the Areas of Highest Leverage
Small changes can produce big results, but the areas of highest leverage are often the least obvious. (Law of Systems Thinking)
Often we equate the word “innovation” with highly technical products that are complex and are produced by geniuses. My personal definition of innovation is a solution which provides significant impact. The greatest innovations are simple executions of big impact ideas and are engineered by people that have mastered the act of creating solutions that address “the heart of the matter”.
Identifying opportunities that are “the least obvious” requires that you operate in an observational state of experimenting, learning and measuring.
Problem Solvers Change the World
What happens if you changed your title to “problem solver”, resisted the urge to build something and walked out of your office to learn more about the community that you’re attempting to impact?
How much extra is it costing you to build and then discover vs discover and then build? How much could we change the world with nothing more than the wasted resources spent on building untested ideas?