In this blogpost Sarabdeep Singh, shares his who own experience of bootstrapping start- ups. He was formerly associated with Ebay as a Digital Head and has vast experience in bootstrapping start ups. He is currently in mission to solve the problem of personal finance and investment with his new bootstrapped starup, Bodhik.com.
In last 3-4 years as funding scene exploded, Bootstrapping suddenly became out of fashion for startups. So the defacto way startups traditionally used to grow was no longer preferred way for a lot of new-gen founders. With funding boom cooling down; and VCs backing down on funding based on a PowerPoint presentation but looking for additional things like
• Product-Market Fit
• Unit economics
• Operational break evens
• Sustainable revenue streams
Bootstrapping is again in vogue, more and more founders are looking to take the tougher route to bootstrap their startups to growth. Having bootstrapped 2 startups in last few years Fachak ( content aggregation and sharing) back in 2008 and Bodhik (online Financial Advisor), here are few tips I would want to share with fellow comrades trying to build lean startups.
Start from home or a co-working space
There are 2 things that are premium for startups one is money and another is time. While money part is reasonably well understood what is not well understood is the value of time. In the real world, time is more valuable than money in most scenarios. As you bootstrap optimize for both time and money and first optimization can be your workplace. Do not try to set up an office where you have to run operations, either start from home where you have comfortable facilities or work from a co-working space, where everything is taken care of you do not waste time on useless operations management and concentrate on your business, and you do not incur fixed costs to set up an office and in most cases till you grow to a team of around 10 people you can quickly expand
Build all core skill sets in your founding team/early employees.
One of the biggest expenses in early startups at least the Internet startups where you do not have fixed costs like machines, factories or big hardware/material costs is employee cost. You will need people who can build the product, distribute it and get you the initial set of customers and traction, which means depending on your product you will require some combination of following skillsets
• Product management
When you are bootstrapping, ensure you have all the skill sets in your team.
Leveraging Interns and Freelancers contributors
As you start growing your startups, you will require some hands to help you in areas like content or some part of the product; this is where Interns can help. I have personally hired interns directly from campuses as well as places like Internshala, while it can be tough to hire right interns, but if you keep on improving your hiring process, you can get decent folks at a fraction of the cost which you will have to pay otherwise. Interns also help you to do some focused experiments and see if you need to scale them.
Look for deals, freebies, free trials tons of them are available
As you build startups especially in Internet space, you can use a lot of cloud-based services from cloud hosting services to Marketing automation tools, SEO tools, project management tools, mails and document management tools.
Try to look up for deals and free credits, talk to folks in networks with right efforts you can always get AWS credits, Azure credits, discount on Gmail for business. There are tons of free tools available for all you do, If not use free trials to see what value the tools add and then you can decide whether to pay or not.
Plan your finances well
Startups are generally full of surprises and if they are not they will be boring, so be assured you will get your share of surprises. From product launch delays to marketing not working, to employees leaving. While you cannot do a lot about these surprises but what you can definitely do is plan your finances well, In my first startup Fachak, our product was super delayed, when we launched we were already running out of money and then we were running helter and skelter to save money and worst of all when the product started getting traction we were out of money.
It’s very important you plan your runaway well and in your financial plan make provisions for worst case scenarios, keep expenses low & always keep an eye on cash flows
Don’t waste time going to conference or events
Till the time your product is out and you are looking for traction, going to conferences and events are a sure shot waste of time. Most of these so called networking events are filled with wannabes and you will end up wasting a lot of time
Go to events and that also focused events when you want to raise money or to events like trade fairs where you might get a lot of customers.
Focus on product and your customers and nothing else
As you bootstrap, you will have tons of distractions on a daily basis from operational issues to family issues to relationship issues, to prospective investor issues. Please note in bootstrapping phase your primary focus should be only and only product and nothing else.
Enjoy the journey
Finally, the most important tip as you bootstrap is to enjoy the journey every day, every moment while milestones and goals are important. The key is to enjoy the journey that’s the ultimate pleasure you can get from building a startup.