The root of all bootstrapping

Filed in archive Bootstrapper Tips on April 8, 2008

Though it may be called the root of something quite different in some religious circles, money, or in this case revenue, is the root of a bootstrapped business and no bootstrapping entrepreneur can really survive without it.

Justin Miller quite rightly defends charging for Pukka, a new software application to be used in conjunction with the del.icio.us social network against a web commentator who believes the product should be offered free in this post at Code Sorcery Workshop.

While arguments can be made for giving away early services or prototypes to gain valuable customer feedback and promote interest and use, Miller used money from Pukka to bootstrap other aspects of his business.

Some reasons money for products and services can be crucial to the bootstrapper from day one include:

• Survival. Because they have no outside investment, bootstrappers often must have revenue just to keep their company alive, their employees, if any, paid and bill collectors from the door.
• Growth. Using existing revenue to grow a business remains the classic bootstrap approach. Consider the way Andrew Fields used an existing printing business to grow an on line printing service, PrintingForLess.
• Market testing. Greg Gianforte argues that bootstrapping is the best way to tell a good idea from a workable business model because an effective business model will make rather than cost money.
• Forecasting. Dane Carlson recommends not leaving your day job until you can convince at least one person you don't know to buy your service or product. The same philosophy of choosing direction by seeing what makes money and what does not is the essence of the bootstrapping approach.