Bootstrapping requires organic growth

Filed in archive Bootstrapper Tips on December 23, 2007

In his "Four Pillars of Organic Growth" at Inc.com Joel Spolsky co-founder and CEO of Fog Creek Software suggests cash flow, hiring, publicity and quality must all increase at roughly the same rate in a successful bootstrap venture.

• Bring in cash flow from too many customers all at once and you won't be able to hire staff fast enough to provide necessary services.
• Hire too fast and you can't indoctrinate new employees into the company culture meaning quality and service will suffer.
• Get publicity too early on before you have a good quality product or in some cases any product at all and they may never give your company a second chance.
• Fail to bring up quality to meet increased demand and word of mouth interest in your product and customers will also loose interest.

There's something about all this that implies the need to start small and build up slowly to your big idea. (Joel uses the example of starting a small Vermont ice cream shop before expanding to a giant ice cream empire. Now, who could he be talking about?)

It's also something struggling entrepreneur and consultant Alan Wilensky (who likes to refer to this blog as the Business Bootstrapping Blogger Brigade) is discovering with his venture ThruDispatch. (See more detailed discussions on the startup complexity issue here.)