So how does the most stories begin? There could be lots of reasons, but the most prominent are: either the Individual is obsessed with the happenings, popularity, amount of funds realized in the accounts as funding in Startup Eco-System or he/she is not satisfied with the current solution of a problem and wants to bring a complete disruption in a particular process or technology to solve that specific problem.
We start with a problem or an Idea (It’s better we identify the problem first and then think about the respective ideas to solve it in a better way than ever before). Based on it, we initiate building a team and a product/solution. During the course our core focus always remains on creating a better product and improvising it continuously based on user experiences and feedbacks.
We always find ourselves thoughtful about the complete business process i.e. product specification, upgrades & extensions, launch & marketing placements, targeted customers, competitive pricing etc. But unfortunately, soon after our beta release, we start participating in the race to get funded. Consequently, our focus starts diluting towards preparation of pitch decks, networking events, exhibitions and product showcase programs.
Here we see changes in our priority & focus i.e. funding, funding and only funding now. Every time we face rejections, we feel demotivated and unconfident about our solution. We start losing our patience and a feeling of doubtness starts cropping in. Sooner or later we die or start thinking about some new fundable business idea. Why? just because we completely come off the track and become a startup who is standing up merely to raise funds.
So let’s begin with the first sentence of the third paragraph of this post “We always find ourselves thoughtful about the complete business process i.e. product specification, upgrades & extensions, launch & marketing placements, targeted customers, competitive pricing etc“(repeated sentence). Instead of raising funds from external sources, if we keep our focus on our business process only, possibly we will end up with good positive results.
There are number of instances where startups have proved themselves first even without raising any external funds. This happened because they chose to go bootstrapped first. It’s not necessary for all the startups out there, but it’s good if we do so. Bootstrapping your startup venture really got good advantages and I am trying to sum up a few of them here.
1. Always Keeps You Focused: When we are a self funded startup, we understand what we got in terms of funds and what we have to achieve with the help of it. So we prepare our process roadmap very efficiently and economically. We think about spending most of our funds on product/solution and less on marketing, more preferably marketing at no cost.
We engage with our customers, hence we are the prima-facie of their problems using our solution. If the same feedback received from multiple customers, we incorporate the suggested changes to bring efficiency to the whole process. As we have to spend less on office infrastructure, staffs, sales & marketing hence we remain cool and not in pressure. You know, during bootstrapping we can see that the product we assumed has resulted into more efficient solution because of the free & thoughtful mind, brainstorming sessions with team members and in due course suggestions from our customers.
2. Your Venture Is In Your Control: As we are not diluting any stake in exchange for funding hence the complete control of the business is always in our hands. We can freely think about, what to do next, how to do next, and when to do next (upgrades/changes/pivoting). This is really an important factor for the initial success of your startup. Now you might be thinking, I am wrong, as all the Investors are not the same, few of them are there who ask the founders to grow their business as per their own decisions and assumptions. It’s true, you understand that you are using someone’s money and will somehow feel pressurized about it.
You will have to meet your Investor on a regular interval, will have to submit business, audit & plan reports subsequently. Here again, you start working on number of excel sheets to prepare the reports for your Investor rather than working on your product. So I suggest keep complete control on your business till the time it really needs.
3. Good Traction, Repeat Customers and Steady Business Growth: We are not spending thousands of dollars on advertising and promotions hence we know we are not going to be flooded with hundreds of customers daily. Whatever customer base is there, probably we will be able to recall them by their names and mobile numbers. If it’s so, you are going good. It means you have developed a great relationship with your customers and they are definitely going to stay with you for a while.
During bootstrapping we take the customer’s problem on both the parameters i.e. personal and professional, that’s why they feel ease of doing business with hence resulting into a repeat customer.
4. Faster Profitability and Higher Valuation: Bootstrapped companies got higher chances to be profitable in early stages compared to startups funded in early stages. This may be due to differences in business plans, marketing spends, staffs to handle business needs and accumulating all “monthly cash burns”.
This is also a fact, I guess we all know this, a startup which is already profitable gets a higher valuation compared to the businesses which still have not even reached break-even.
This post is not against getting funded, but yes its a kind of suggested posting on “How we can make things better in startups with bootstrapping?”. So guys if you are bootstrapping your venture, probably you would have definitely experienced some part of my post. If yes, please share it with your friends and pat your back for once at least.