How do you bootstrap your startup?

Google Sheets came from a bootstrapped startup called 2Web Technologies - actually from ITK Solutions from which we spun off 2Web. ITK was a consulting services company we started, which leveraged our expertise - and relationships - in Financial Services technology. In our experience, that was the key to bootstrapping - starting in an area where we had credibility and relationships to very quickly add value to our customers businesses. Customers like CSFB and RBC hired us because they trusted us. We were profitable within months and grew by hiring more credible, experienced financial services technologists. 2 years in, we spun off 2Web and started building the product which eventually would be sold to Google to become Google Sheets.

The biggest reason why startups also fail is that they start chasing investors from day 1 instead of focusing on their business or product. Here is what you can do - - Start small and focus on one core product - Be frugal and resourceful. - Leverage free and low-cost tools and resources. - Build a strong customer base and generate revenue early on. - Try Debt/Venture Debt once you start getting revenues. Remember you are building a business and not just selling a product. A great team, working revenues, strong vision, great product and a awesome GTM can do it all.

Bootstrapping a startup can be one of the most rewarding as well as scary endeavors you can undertake. Some tips include: (a) try to minimize debt, (b) handpick the most driven and successful people you know, (c) accept that you will need to wear many hats, from banker to lawyer to janitor, etc., (d) reduce expense to the bare essentials, (e) conduct thorough market research (make sure you know what you're getting into), (f) create a minimum viable product (MVP) as quickly as possible ... and most importantly ... try to have fun 🙂

First and foremost - think about the person who is investing or going to invest - when you are bootstrapped. These pointers should help you in your journey - Start with a lean budget: Prioritize essential expenses and avoid unnecessary spending to conserve resources. Utilize personal savings and resources: Leverage personal finances, skills, and assets to fund initial operations. Explore alternative funding options: Consider crowdfunding, angel investors, or microloans as potential funding sources. Focus on customer acquisition and revenue generation Adopt a growth-hack mentality: Be creative and resourceful in finding cost-effective ways to acquire customers.

To bootstrap your startup, focus on minimizing expenses, prioritize essential tasks, leverage existing resources, seek cost-effective marketing channels, and reinvest profits back into the business for gradual growth.

Do not use 3rd party fundraisers unless you are backed by a community that fits. To many startups thought this is the way to bring in money, but what they forget to tell you about is that it takes years to build that size of a community. By the time you are done, your users need to be growing along with you all the time and still be able to financially give you that support, and willing to do the long wait. It can be done in a year, but most likely not. Fun fact, tons of Kickstarters are actually done by companies running it for your product, bringing in their own investors and communities. In the end it just means you are not bootstrapped anymore. 3rd party, it means what is says; outsiders.

Low-cost tools and platforms can be costly to time and efficiency if we're not careful. When I decided to build my website, I chose a website builder that was easy to use and affordable. But then I realised that: * They disabled Comments for blog posts. * They didn't allow social sharing buttons like Pinterest. * I didn't have access to the Head so I couldn't put in my own code to do what I wanted. I was trying to build awareness and something as simple as pinning a post and commenting on articles could not be done. 😱 I had to start from scratch on a different platform which I currently use, that matches my goals. Make sure your tech choices, while low-cost, don't waste your time. That's more costly in the long run.

It's never been easier from an startup perspective to quickly build the infrastructure you need and play bigger than your size. Cloud platforms from g-suite to dropbox to docsend can provide the framework for you to build the foundation of your operations. Try to keep things simple and choose a platform that already has many services integrated into it instead of selecting best in breed point solutions which require a specific set of expertise and effort to manage.

Developing a business plan that outlines your immediate, mid-term, and long-term goals is key to understanding the resources you need to build your business. A well thought out business plan allows you to analyze and prioritize resources. Think creatively. There are many tools to help you produce the necessities for growing a business, in-house. This saves money for the items that require staff, software, tools, and expertise outside of your internal capabilities.

Low-cost tools and platforms are your allies: 1️⃣ Web Development: Bubble, WordPress, Wix. 2️⃣ Design: Canva, Adobe Spark, Sketch. 3️⃣ Hosting: Bluehost, HostGator, AWS. 4️⃣ Analytics: Google Analytics, Mixpanel. 5️⃣ Email Marketing: Mailchimp, SendinBlue. 6️⃣ Social Media Management: Hootsuite, Buffer, Sprout Social. 7️⃣ Customer Support: Zendesk, Freshdesk, Help Scout. 8️⃣ Crowdfunding: Kickstarter, Indiegogo, GoFundMe, Patreon. 9️⃣ Community Engagement: Patreon, Discord. 🔟 Project Management: Trello, Asana, Monday.com. Leverage these platforms to reduce overhead, increase efficiency, and validate your idea. Bootstrapping is about smart resource allocation.

Being able to bootstrap your startup is a luxury that many can't afford, and it's still hard to do. As a founder bootstrapping your business, you need enough money to pay your personal expenses while also keeping up with your startup's cash needs. And, when doing the calculations on this, be conservative. Your business will often need more funds than projected, and getting to cash flow positive will always take longer than you expect. Ultimately, the benefit to bootstrapping is more equity retained by you the founder and being your own boss without outside investors' input. Of course, once you've bootstrapped to profitability if you want to get outside funding it will be much easier, and with significantly better terms.

As a bootstrapped founder, there are three key things to focus on while hiring 1. Don’t over-hire - Hire only for important roles and things which can’t be outsourced. 2. Hire full-time folks only when confident - When you bootstrap, you have less room of hiring errors. So, hire passionate people. Work with folks for few months before hiring them full-time 3. Optimise cash flow all the time - It’s not easy to increase revenue by 5X in few months. However, your costs will increase 2X every 6 months. So always keep the checks and ensure you break even at the start.

In my experience, you should bootstrap your startup by taking on only a business that is lucrative. You can take on projects that will not result in immediate profit but will result in new business only if it only takes your time or the costs are negligible. Avoid loans at all costs! Read this line as many times as needed to avoid loans.

This is the key point in the article. If you're bootstrapping, you want to get to profitability as quickly as possible. Your growth will be slower than if you take on investment, but the bar to success is lower too. You'll focus more on profitability over growth. Bootstrapping is usually better if you want a lifestyle business. Maybe your company can churn out a $100k or $200k salary for you, every year. Alternatively, if you want to sell your company for millions, taking on investment is usually the better route and focusing on growth over profitability.

One of the best indicators of a great product is if you can convince your first set of customers to pre-order your product. This is something we were able to do at Lipa Payments. However, this introduces additional time pressure on your first release. Users who pay for your product up front expect more from your Minimum Viable Product.

As a co-founder of a bootstrapped SaaS startup that was acquired, LISTEN to your customers and implement their product requests. Being customer-centric doesn't mean you build everything they are asking for, it means you look at the collective feedback and solve a problem that will make many customers satisfied. We would have not had success without our first 10 customers being partners in some of our early decision-making. Don't discount speaking to customers often.

People overlook the value of personal touch in today's digital age. While emails and social media are essential, don't underestimate the power of a phone call. Speaking directly to your customers not only builds trust but can yield insights you might never glean from digital interactions alone. It's amazing how much you can learn when you actually listen to the voice, the tone, and the stories of your customers. Surveys can be gold mines as well. You can uncover what customers love, what they're lukewarm about, and where you might need to pivot or improve. Show your customers that you're not just in it for the sale – you truly value their partnership in your journey. And that kind of loyalty? It's priceless.

Let your customers keep you honest. I like to think in terms of scales of ten. You don't really have a product until 10-100 people are actually spending money on the same offer. That's usually the scale where you run out of friends and family to buy your stuff! At that point, it's about focusing on the common traits across that customer base, finding more customers like that, and building a product that suits those paying customers down to the ground. 100 to 1K is about actually building the product (you can't manually force it usually). 1K to 10K is about figuring out how to scale, channels, and partnerships, etc. And beyond 10K is about growing through the team.

Cultivate a loyal customer base for steady growth: 1️⃣ Value Delivery: Consistently deliver value that meets or exceeds expectations. 2️⃣ Effective Communication: Maintain open channels with customers, understand their needs and pain points. 3️⃣ Feedback Loop: Utilize customer feedback for continuous product or service improvement. 4️⃣ Referral Programs: Encourage word-of-mouth through incentives, rewards, or referral programs. In the bootstrap realm, your customers are your greatest allies. Nurturing a loyal customer base not only supports growth but also fosters a community around your brand, propelling you through the bootstrap journey.

Your customers are the ones who will steer your business to new heights. So make that base stronger and permanent. Utilize your knowledge and skills to attract customers, and with high-quality products and effective customer management systems, strive to retain them. When you build customers who keep coming back to you, then you have nothing to worry about. Your business will be successful.

Strategic partnerships are an excellent way to further your business. However, be sure to fully vet the partner. Some important considerations include: Value Proposition: Determine how the partnership will bring value to both parties. Due Diligence: Conduct thorough research into the partner's reputation, background, financial stability, and past partnerships. Capabilities and Expertise: Evaluate their expertise, resources, and capabilities. Risk Assessment: Consider factors such as financial and reputation risks, and legal implications. Contractual Agreement: Establish a detailed partnership agreement that outlines roles, responsibilities, expectations, contributions. Consider conducting a pilot to understand the value to both parties.

I've donned the CMO hat for multiple projects, and let me spill the beans - strategic partnerships are a game changer! They unlocked doors to organic traffic which was nothing short of magic. One such venture started from ground zero, a blank slate. With a blend of synergistic partnerships, it skyrocketed to a community of 100k+ followers. All organic! We knit partnerships with brands that echoed our vibe, their shoutouts were like jet fuel for our growth. The cross-promotion was real, authentic, and resonated with the crowd. Our partners’ audience found value in what we offered and vice versa. It was like watching a barren land blossom into a bustling ecosystem.

Strategic collaborations can help bootstrapped firms gain access to new markets, improve resources, boost credibility, share risk, and benefit from complementary capabilities. Novices can boost their chances of success while starting a business by carefully identifying possible partners and approaching them with a clear value proposition and a well-defined plan.

Successful alliances involve four stages: awareness, exploration, commitment, and dissolution. Some Key Factors : - Define your goals. Before reaching out to potential partners, take some time to clearly define your goals and objectives - Do your research - Consider all options - Draft a proposal - Be prepared to negotiate

Distribution is king. When you get started, you have zero partners, zero channels, and zero customers. If you're relentless about chasing partnerships, and if you're able to show value to your partner even as a small scale business, then you can unlock growth hacks that let you access partner customer bases affordably. That being said, be aware that the value of that access is going to depend almost entirely on the complimentarity between your products and theirs. If they don't go together, their customers are unlikely to care about what you offer.

Learning and adapting also means being ready to pivot quickly to deliver what your potential customer is asking for and needing. You may have entered the market with a solid product or service idea, but if you pay attention to the feedback gathered, it may be telling you to reiterate. Don’t be afraid to do so. Don’t marry the initial idea. Flexibility of mind and empathy driven business practices will take you further than trying to push an initial idea.

Using own internal accruals and savings is the best way to bootstrap your startup. You maintain full control over your business's direction and decisions. It showcases your commitment but also demonstrates your belief in the venture's potential success. If you encounter a need for additional capital, consider seeking support from immediate family members, close friends, or relatives. Present your business plan and potential returns in exchange for equity or a stake in the company. When involving family and friends, formalize agreements to avoid misunderstandings in the future. Clearly outline the terms, ownership stakes, and expectations to maintain healthy relationships.

'Learn and adapt' and 'Seek strategic partnerships' is basically the same when you are bootstrapped. You don't have the cash to pay for others so when looking for a strategic partnership, why not find people in the same situation. I know nothing about the actual game development but yet, I have worked with tons of game devs who ate ramen to keep their costs down. In return we always worked something out. Weirdest deal I think I ever made; I'm a Steam achievement now. Don't ask! Learn and adapt to your situation by choosing the partners that can help you grow your product/startup. Don't go spending money on content creators unless you are willing to bring in outside investment to pay for it.

To me the FAIL FAST concept comes in here. Test & Measure fast and in every step of your evolution. Get feedback from "everywhere" (the market, customers, suppliers, personnel, family, experts, ...) and make fast decisions to adapt of drop certain projects. Speed is of importance!

Learning and adjusting are critical for a bootstrapped startup's success. When starting a business, novices can boost their chances of success by constantly growing with the market, making the most of limited resources, listening to consumer input, staying ahead of the competition, and embracing new technologies.. it helps one to stay ahead of the curve.

Beware of Death by Process. It is a trap by many startups to build policies and processes that do not match their capabilities to administer them. Teams can only grow at the pace of their weakest links, and implementing processes can cause bottlenecks that slow down progress. For example, creating a formal approval or request document that must be submitted to enact a change to a project, or to trigger shipment of a product. If you are a team of ten people, just pick up the phone or knock on the door. PROGRESS OVER PROCESS is the mandatory default.

Avoid using any personal debt (yes, that includes your credit card) if you can't pay it! Determine how much cash does your company needs and use that as a limit. You may include additional capital from your other personal revenue generating sources on a periodic basis. Just don't spend money you don't have. Before starting a business, make sure you have enough cash on hand to make sure it survives until you are able to pass your break even point or raise external capital or debt.

Start small with available resources in the domain you have experience or expertise in. Focus on your customer wants. Generate word of mouth leads to avoid spending on promotional activities. Avoid loans, VCs, equity distribution during initial stage.

Stop improvising, one of the top beliefs in the startup world is that creating a startup means you need to improvise everything and you don't know anything; that is just false, think of it like, investing time in defining and planning gives you a 5-10x ROI on time. Understand your needs, their journey to scale, and how can you automatize them, or make them more efficient, without thinking about needing money. Support for 10,000 clients? Sort % of cases: 50% want to know how to activate and configure a SaaS,self-help and tutorials 30% need to connect other accounts,services and users, again tutorials, and self-help finally 20% need someone with a particular problem, tickets that suggest articles, and a couple of people for support.

Don't be a perfectionist at the expense of actually executing and delivering. An imperfect product can generate plenty of revenue - improvements can be made over time and with customer input... Waiting to deliver until you have a perfect product is a recipe for never delivering...