Bootstrapping is taking the business world by storm with its unique mixture of unorthodoxy and common sense. At its core, bootstrapping enables entrepreneurs to work without debt. However, there are other key points to consider when bootstrapping your business. This post contains a list of tips straight from the experts — people who have bootstrapped their way to success. Read on to discover what they had to share with us when I asked them to reveal some of the most important things they have learned on their own bootstrapping journeys.
Brainstorm Business Ideas Methodically
When you're just starting out, you'll need an idea. Actually, you'll ideally want more than one, followed by a method for considering the "candidates" and picking a winner.
Corbett Barr (Founder of Think Traffic, Co-Founder of Fizzle):
Make several lists: things you're interested in, things you're good at, things you think are hot business opportunities. Then list different groups of people you identify with, and problems you'd like to solve. Make a little spreadsheet with these opportunities, and score them based on what you know about what makes a business successful. Once you narrow things down, you should start exploring by talking with real people.
Dig Deep to Uncover the Best Ideas
Bootstrapping experts agree that it is vital to spend lots of time with your potential niche. Engage with people who might one day buy your product and discover what makes them tick.
A few aspiring entrepreneurs find trouble when trying to brainstorm an idea for a business. Even those who have an idea of what they're aiming for should make sure that their product or service can be sold to real people. Either way, engagement is key.
Shane Melaugh (Co-Creater of SECockpit):
Get deeply immersed. Get really deep into your market or your niche, if you will. For me, this has always been key because two things happen when you get very deeply immersed in a topic:
- I start seeing opportunities and problems that I couldn't see from before and I start understanding what the prospects want and need (because I'm becoming one of them). I also interact with people in the market, know where they hang out, what they talk about etc. (again, because I'm one of them).
- Brainstorming becomes a non-issue. I don't have to seek out ideas. Instead, I start seeing these problems and issues and I feel a real pain when some ideal solution doesn't exist. When I can't stand it any longer, I just have to create a solution and because I'm immersed and I can get in touch with people in the market, I have a good idea of whether people will be willing to pay for the solution, too.
Justin Cooke (Co-Founder of Empire Flippers):
Hustle -- go to where your potential clients are and ask them about it. Find out what their needs are, get feedback, adjust your product/service based on those needs, etc. This may include forums, membership sites, blog comments, or in-person events. Get involved in the conversation long before you spend countless hours and dollars building out something nobody needs or wants. Talk about your idea and don't worry about whether someone's going to steal it or not.
Get close to the actual people who might purchase your product or service. Find out if they think it's a good idea. Don't operate for months in a vacuum, hoping to create some perfect product. There's too much risk you'll end up with something nobody wants. Talk to your customers.
Find Problems That Need Fixes
While it is vital to discuss issues with your potential customers, you should keep the right goals in mind when learning about a niche. It is often more beneficial for you to discover problems that people face than it is to shoehorn something you love into a business idea (but if you can do both, that's great).
The fastest way to find [the convergence between what you love to do and what others are willing to pay for] is to get clear on what you love to do. I think there's a lot of latitude here, to be honest. Most people like lots of different things, and that's perfectly normal. Sometimes it's easier to find this overlap by starting from the opposite direction: who do you think you can help, and how?
While it's certainly a bonus to build a business out of a niche you're passionate about, I don't see it as a necessary requirement. It sounds simple, but finding a need...an itch that people are willing to pay to get scratched...seems to me the more important of the two.
I've found that while doing the necessary digging into a niche, you'll likely come across angles you DO feel passionate about. With us, I don't particularly care about making a small niche site about "blue ski boots", but I do love building our team here in the Philippines, helping others build their online empires, etc.
Additionally, filling a need can help you fund the projects you really do care deeply about.
It's the most basic tenet of bootstrapping: don't take out venture capital. Instead, haul yourself up by your own bootstraps.
Instead of distracting ourselves building pitch decks and flying all over the country, we allocated about 25% of the team’s time to client work and used that money to cover our development costs.
By the time we launched, the price tag on Flow came in around $300,000. Not only is that way less than your average VC-fueled startup, but by doing it ourselves, we retained 100% of the equity. Plus, if we do choose to take on investors in the future, our predictable growth and recurring revenue will mean we fetch a much higher valuation.
Don't Run Endless Tests
When you finally do discover a problem that you can fix — and get paid to fix — you should do it. The core of the bootstrapping mentality is a rejection of esoteric, long-winded business plans. As such, the market is the only test that you need.
Danny Iny (Co-Founder of Firepole Marketing):
The best thing [people] can do to determine whether or not they have a marketable idea is to actually try to market it, and get people to buy; there's no proof of concept as valuable as actual paying customers, even if they're in small numbers. Don't ask questions, or run surveys, or try to find out whether they would hypothetically buy it — ask them to actually put money on the table to be one of your first customers.
Don't Expect Miracles From Launch Day
Once you decide to enter the market, you need to be in it for the long haul. However, don't be afraid to celebrate the moment for what it means.
Derek Sivers (Founder of CD Baby):
Nobody cares about day one but you. It's a non-event to everyone else, so aim to make it a non-event for you, too. Nobody cares about a launch. They need to hear of something many times before they try it out. So think persistence from the start.
Mark Forrester (Co-Founder of WooThemes):
Celebrate [on launch day]. There's a heap of work ahead of you, but take note of the moment. Take a photo, document this day. You're one step closer to success.
Start With One Customer
Your idea only works if someone will pay you for it so a key part of diving into the market is aiming to snag that first customer.
Get your first customer before you create your product. Think one customer at a time, to begin with. I do a lot of one-on-one talking to people in markets I want to enter. You can even go as far as pitching your product as if it existed, to see if you could get someone to sign up. I think a common mistake is to think large-scale too early on. "How much traffic can I get?" It doesn't matter. First, ask: "Can I get one customer?"
Find something you can do for one person. Ask your friends, "How can I help? Anything I can do?" See what even one person is willing to pay you to do. After they do, see if a second person is willing to pay for that, too. If a dozen people pay for it, find a way to systemize it and grow it.
Practice, Practice, Practice
Practice may not mean perfect, but it can mean improvement.
The other important aspect is practice. Just like anything, creating marketable products is a skill. The products I create now are vastly superior to even my brightest ideas three or five years ago. Why? Because I kept creating, testing and launching new products.
Be Honest and Sincere
It is never a good idea to lie or talk down to your customers. You should respect them, only then will you be set up for success.
Don't try to project some image.
This is something I love about online business: sincerity goes a long way. You don't have to have a brand-name tailored suit and high-end business cards. If you can show that you're real and you're sincere about delivering great work and/or a great service, that goes a long way. Act like a real person and be enthusiastic about what you do.
Be honest, be helpful, care about your audience. Explain what you do in plain language. Ask yourself why someone should pay attention to you versus the other choices out there.
Mark Forrester said in an interview:
We engage with our customers whenever we can and, within reason, let them dictate where our business is going. Customers who feel valued and important will become your product evangelists.
Track Your Progress
As much as “soft skills” like honesty and communication matter, don't forget the hard data. You can use it to motivate yourself, but don't let the data overwhelm you.
Brian Casel (Founder of Restaurant Engine and Hotel Propeller) writes on Mashable:
As you’re building traction and experimenting with various marketing tactics, it’s important to measure results so you know what’s working and what’s not.
But don’t dive too far into the rabbit hole of startup metrics. Between Google Analytics and the growing list of other metrics tracking tools on the market, it’s easy to get lost in a sea of charts and statistics. Just because you can track 30 different metrics doesn’t mean you should...I suggest picking just a few key metrics to keep your eye on: traffic, lead conversions (email opt-ins) and customer conversions. Knowing where your traffic and conversions are coming from is important, too.
There are bound to be peaks and valleys in your entrepreneurial journey (The "Entrepreneurial Roller-Coaster") — this seems to be something we all go through.
The best thing you can do as an entrepreneur is to know when you're winning so that you can extend your winnings or "peaks" and minimize the length and depth of the "valleys". Tracking and measuring your success can help remind you that you're still on an upward trajectory, even with the recent, minor setbacks that have (temporarily) crushed your spirit!
Don't Make Changes for the Sake of Making Changes
With data in hand, some people get overzealous. Instead, you should stay the course if things are on the right track.
Innovation is important, but changing things for the sake of changing can screw up a perfectly good opportunity. Success in business often comes from recognizing when something is going well, then doing that thing over and over again.
Ask Yourself Two Questions to See if You Need to Pivot
If things are not fine, then you need to embrace one of bootstrapping's core tactics: the pivot.
Chris Guillebeau (Author of The $100 Startup):
If an entrepreneur is considering changing direction with their business (pivoting, if you prefer), but isn't quite sure whether to do so, what is/are the biggest factor(s) they should consider?
The two considerations are:
- Is the current direction working? (i.e. Is it profitable? Are customers happy?)
- Is the entrepreneur still motivated and eager to stick with the current direction?
If the answer to both questions is "yes," you can safely stick with the current plan. If the answer to both questions is "no," it's definitely time to change. If the answer to "one" of the questions is no, that's when you need to do more analysis.
Make Growth Sustainable
Whether you pivot or persevere, your goal early on in a startup is growth. This is especially key when bootstrapping, as funds for further innovation will only come through profit. But your growth should be sustainable.
Eric Ries writes in The Lean Startup:
The engine of growth is the mechanism that startups use to achieve sustainable growth. I use the word sustainable to exclude all one-time activities that generate a surge of customers but have no long-term impact, such as a single advertisement or a publicity stunt that might be used to jump-start growth but could not sustain that growth for the long-term. Sustainable growth is characterized by one simple rule: New customers come from the actions of past customers.
Figure Out How to Manage Your Time
Regardless of how many times you need to pivot or what you need to do to grow, if you want a business that lasts a long time then you'll need to manage your time.
I found that email and being reactive all day was my worst enemy, so I stick to a fairly strict schedule these days.
I work out first thing in the morning. Everything goes better when I get a workout in. Then I plan my day for about 30 minutes. I ask myself what is important, and what I need to accomplish. I set a couple of targets for the day. Then for the next few hours, I work on something that will be published or shipped to customers. No email, support or meetings before Noon.
Improve Your Bootstrapping Process
There are a ton of important considerations to keep in mind during the entire bootstrapping process, from initial brainstorming to long-term time management. The experts quoted in this post make that clear. However, if you act on the above tips, you'll find bootstrapping to be a great path to entrepreneurial success.
What do you think about bootstrapping? Do you have any tips of your own? Please don't hesitate to let us know in the comments section below!