It’s time to kill the term bootstrapping
Okay maybe not kill it, but we have seriously stretched its meaning to point of uselessness. We need some new terms that are more accurate and meaningful.
The word “bootstrapped” pretty specifically means a business built without taking any outside investment capital; pulled up by one’s own bootstraps so they say. In the tech startup and online business world, the dominant form of capital has always been venture capital (VC). Over time bootstrapping companies evolved a culture and a set of values and priorities defined primarily in opposition to all the things that come along with the Silicon Valley-focused VC model of tech startups.
Specifically, bootstrapping entrepreneurs reject:
- Pushing for billion-dollar exits regardless of risk
- Founders losing control of their personal life and company destiny due to multiple rounds of investment
- A culture of workaholics and constantly “crushing it”
- Praising paper valuations and funding rounds over “real” businesses with sustainable sources of profits and competitive advantages
Bootstrappers by contrast:
- Prefer profits over paper valuations and hype
- Avoid moonshots and prefer a much higher probability of success
- Value longevity and viability of a business over growth at all costs
- Balance business growth with founder, employee, and customer happiness
- Prefer remote teams and flexible work
But increasingly there are forms of capital that are aligned with the values of bootstrapping and bootstrappers themselves are starting to become more interested in the idea of outside capital to accelerate their business toward profitability.
Which raises the question:
Are you still a bootstrapper if you raise outside funding?
Some say “No,” bootstrapping means no outside capital, plain and simple. On one hand, I tend to agree, that is what most people infer when you use the term. On the other hand, people are saying ‘bootstrapper’ in a lot of places where they really mean something else which is entirely independent of the funding question.
Some people are squaring the circle with portmanteaus like Fund-Strapping (fundstrapping?). I tackled this by focusing on the size of the team needed to run the business with “Micro-SaaS” — but I think this is getting pretty convoluted and too focused on the secondary questions of cap tables and the current number of employees. We need a term that reflects the principles above. Leaving the questions of outside capital aside how would you describe these principles?
For me words like deliberate, intentional, sustainable jump out.
But for now, I’m going to start using “earnest.”
Earnest (adj): resulting from or showing sincere and intense conviction.
Earnest entrepreneurs, earnest founders, earnest businesses, earnest teams…
I think it fits. And then, of course, there’s earnest. I like the embedded focus on actually earning.
What do you think?