There are many articles about the joys of bootstrapping and, on the other hand, the pitfalls and unlikelihood of success. This isn’t surprising. For every action a person might take there will be possible positive and negative outcomes. So, how do you avoid the pitfalls? It’s really pretty simple. Start with a product you know people want. Promote it in the right places for a cost you can afford (free is good) at a price your customers can afford. Put the money in the bank and don’t use it until you really need to.
1. You’ve heard the Kaiser tag line, “Find a need and fill it.” There are success stories that were not based on the existence of an actual need but they are more of a rarity than success stories that are based on need. It’s harder to sell something people don’t recognize as necessary; it takes more money and more marketing expertise. If there is a need for something and you can provide a solution at an affordable price, you can expect to start with that most desired of all business elements – cash flow. How much better does it sound to you to have cash flow from the get go than to be scrambling around trying to find money?
2. With the power of the Internet, it’s not difficult to find ways to communicate what you’re doing and what you’ve got. Status updates on your regular social networking sites can start to build interest before you have even completed development. A clever YouTube video can go viral if you have something people want. For some of you, this might seem challenging but you can write articles about the problem and you can speak about the problem. As the owner of the company with a solution, you aren’t going to make these obvious sales pitches if you want to be published or presented to an audience for free but your introduction will present you as an expert in the field and the owner of a company that provides a solution.
3. Putting the money in the bank and not using it until you really need to can be hard for many people. As a Bootstrapper, you have to be able to do this. One startup that got a nice round of funding used it to coat a pillar in their lobby with gold leaf. Because you aren’t getting nice rounds of funding, it’s easier to resist temptations like this. It’s not impossible for you to stay in your house or apartment until you really need an office space (if you ever do). When you really need to spend some of that money is on your own salary, on people when you need more people, and on the next release when you learn from your customers what more they want from you. That’s important – the improvements come from your customers wish list, not your own.
Conclusion: These three steps will help you succeed while you maintain control of your business and put you in a strong position for growth, profits, and acquisition.