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Bootstrapper Tips
by Shawn Hessinger on September 18, 2007

And while we're on the subject of definitions for business bootstrapping from our post yesterday, Matt Rogers founder of Aroxo has written another great one as a guest at Read/Write Web.
Matt explains that bootstrapping, at least for a computer based start-up, means:

• launching a business on a low budget
• Practically this means that you'll outsource (most likely off-shore) your design and development
• you'll rent your servers
• you won't have an office
• you'll have no salary
• the only expensive professional services which you'll buy will be your legal advice and accountancy services(and sometimes not even those)
• Everything else, you'll have to pick up yourself and learn as you go along
He gives two reasons an entrepreneur would chose this path:
1. The founders may believe they are onto such a good idea that they don't want to give up any equity
2. the founders have taken on a small amount of seed financing, just enough to get them into the market
I'll list two others:
3. The founders have what they believe to be a sound product or service but can find neither banker nor other outside investor willing to provide funding for a variety of reasons
4. The founders believe they have the beginnings of a sound business model but do not want to increase the break even point or be influenced by outside investors until they can determine how viable the business is and thoroughly understand its operation
There are those who would argue that number three is a good reason to rethink the business altogether, but enough well-funded ventures have sunk without a trace and enough bootstrapped launches succeeded to know that there may be a big difference between a working business model and how the same business looks on paper.
Permalink: Another bootstrapping definition
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