Can bootstrapping combat recession?

Filed in archive Bootstrapper News on December 2, 2007

Kevin Koym at Exponential Entrepreneur suggests that bootstrapping through leveraging social capital may be a great remedy for coming recession.

While I'm not sure I share Kevin's enthusiasm for government funding benefiting small business versus big business in the future (how about government funding only for infrastructure and other shared assets to keep taxes low for all business), I do agree that bootstrapping to start a company from scratch is the best approach.

Here are some fresh thoughts on starting from scratch from entrepreneur/vlogger David Clements:

And some great thoughts on how to seize additional opportunities and make things happen with limited resources:

And here are some thoughts on why bootstrapping may be the best startup option for any economy, good or bad:

• Bootstrapping remains arguably the most efficient approach. In his post, Kevin Koym refers to Paul Hawkin's book Natural Capitalism which looks at business waste. In a purely monetary sense, bootstrapping wastes less investment than VC or other outside funding which sometimes backs losers.
• Bootstrapping creates its own resources. Of course, those resources usually come from customers but the successful entrepreneur will generally be filling needs even in negative economic times.
• Bootstrapping builds sustainable models. With little beginning investment to pour into a business plan and none for extensive advertising advertising and marketing campaigns, bootstrappers have little choice but to build a model that satisfies customers in the most efficient and sustainable way possible. Without the income necessary to sustain the model the business simply ceases to exist.
• Bootstrapping creates a brand to product connection. Without millions for marketing to position a brand, the bootstrapper must focus on creating a product or service customers will find remarkable and want to tell others about.
• Bootstrapping produces usefulness. Without outside funding, the bootstrapper must focus on providing what customers need in order to keep cash flowing. Customers then provide the un-insulated feedback needed to produce a useful product or service not through answering questions for marketing research but more directly through sales.