Ingredients vary for bootstrapping success (Part 1)

Filed in archive Bootstrapper Tips on July 12, 2008

Photo courtesy of iStockphoto, Mario Ragma Jr.


There are many possible ingredients for bootstrapping success.

In this post at Impact Lab, Thomas Frey offers his own recipe including some twists you may not have seen before:

• Cut overhead. Not a surprise certainly. And if you happen to be starting a business, the key is not so much to cut as to do without in the first place. Frey describes this as a sort of "mental tai chi", a lifestyle to be lived and a set of values to be internalized.
• DIY. Frey is referring to the unusual commitment necessary from the entrepreneur, a commitment not necessarily shared by employees in your startup. But doing it yourself is at the heart of many aspects of bootstrapping your company.
• Work without a net. This one might seem unusual given that some advocates have insisted less risk exists in the bootstrap approach. Greg Gianforte suggests this bare bones method allows entrepreneurs to start only with what they are comfortable risking. However, bootstrapping is also about using revenue for growth instead of burning investment funds with no real incentive in the end to make the business work.
• Test limits. Bootstrapping forces the entrepreneur to battle test business theories and his/her own capabilities. The approach strips away the excuses and the suppositions and demonstrates whether a business model is workable or just a nice idea.
• Forget the business plan. A controversial suggestion in the business world, Frey's reason for the recommendation is that it can distract from revenue and proving a business model. I've been a part of mature companies that create plans annually. The difference is loads more data including revenue and expense histories and a proven model. These are luxuries a bootstrapper does not have.

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