Bootstrapped, Distributed and Open Source: Startup Holy Grail or Startup Bermuda Triangle ? — Episode 1

The overall answer, of course, is that it depends. There are great examples of companies that have “made it” with varying degrees of bootstrapping, a distributed workforce and open source code. Automattic (https://automattic.com/) and Basecamp (https://basecamp.com/) are some of the more well known examples. Obviously, there are far more examples of companies that silently faded away in an effort to make this magic triumvirate of attributes work.

Our company, Roomify (https://roomify.us) , does not know what its fate will be yet. We are bootstrapped (our bank accounts are painful proof of that), we are distributed (as I write this my co-founders are sound asleep and will only wake up a few hours from now; one earlier than the other) and we are open-source (our code is on Github for all to enjoy). Will this prove the dream we hope it will be or are we destined to silently fade away as well?

This series of posts is an attempt at documenting the path. It is both a form of cheap therapy for me (at your expense, for which I can only apologise) and, hopefully, some help to others considering their options. One more story to either instil fear and dissuade or inspire and convince you to push on.

Episode 1 — On Being Bootstrapped

So let’s start with the being bootstrapped bit and some lessons we have learned along the way.

Get Your Priorities Right.

Roomify was born as a spin-off project of a digital media agency where I was a partner and CTO. The original plan was for a few of us to go do this startup thing we were very excited about but be able to call back to the “mothership” and put in some consulting hours so that we would ensure bills were paid, etc. It did not quite go that way. The push and pull of different priorities soon made it clear that we could not both get to “play” startup and deal with the daily needs of a digital agency. Eventually we committed to the startup and decided to bootstrap it.

This turned out to be key. We didn’t know it back then but it is now clear that unless we committed 100% we would not be were we are now. Our product would not be as good, our knowledge of the space would not be as extensive. We would undoubtedly have healthier bank accounts and a few less grey hairs, but I do not believe we would have a potentially viable company.

So the first lesson we learned is that priorities are important. You need to commit. Yes, I know — every single startup blog post says that is important. It really is — especially when you are bootstrapping. Side-projects (and the associated stress) can drag along forever and you can easily fool yourself in believing it’s a viable project. If you commit you get to find out whether you will make it or not earlier and while your idea is still relevant.

Be clear about what you can and cannot afford with your co-founders.

If you are going to bootstrap a company you need to be super clear with your co-founders about what each can afford to put in and need as time marches on. At Roomify we are not students that can survive on a pot of ramen noodle. We all have families and mortgages and responsibilities. You need to lay it all out on the table and let each other know what you are going to need to pay the bills that month. This can be disconcerting. We are not used to sharing such intimate details.

At Roomify I believe that we are incredibly lucky in that we managed from the start to be very straightforward. Hospital bills, family needs — you need to be feel free to share this information and trust that each one is doing the right thing. Even if Roomify does not eventually make it the fact that 3 people that were essentially strangers got together and shared both personal and work-related ups and downs in such an honest way is something that will outlast any business we may build together.

Get co-founders.

Which brings me to the next bit. I would never be able to do this alone. Not the technical, building aspect. I would simply not survive the stress.

Co-founders are vital for the skills each brings to the table but they are potentially more important for the support each one gives the other. Everything they say about startups being an emotional rollercoaster is completely true. Everything they say about bootstrapping being even more stressful is also true. The support of friends and family is vital but only your co-founders “get it” in terms of the day-in-day-out struggle.

Have a plan. Then make another one.

You need to have a plan at every given point along the path. You need to be able to recognise when that plan is beginning to fray and make another one.

The toughest period we had was last December when it was clear that there were problems with our original plan but it was not clear what we should do next. We managed to talk clearly about it, re-group and that led to a fundamental rebuild of our underlying technology and product. The results are now available for all to purchase and we are excited about the feedback we are getting.

We also know that this plan is only going to take us forward part of the way. We are ready to change again if we need to.

If you are bootstrapping you are not a startup.

I know. It really feels like you are a startup. A lot of of what is out there about startups applies. But you are not a startup. You do not need to make it a priority to attend startup events, participate in hackathons and try and win “startup competitions”. That is for companies that are explicitly not trying to bootstrap. What they are trying to do is find an investor. You have to decide whether your first goal is to get to an investor or get to profitability. If it is the latter then don’t be fooled by all the startup events out there. Being a startup is being part of a very specific industry. The goal of this industry is to match ideas to investors. You already did that. You have an investor. Yourself and your co-founders. Your investors would now like you to be profitable.

Next week I will be looking at what it means for us to be distributed. What are the benefits and the challenges. Provided we make it to next week that is ;)