When I started my own business 20 years ago, I decided to do it on my own. Not only has my business stayed afloat, but it has also survived crises, changes in technology (the first patent I filed was for WAP technology!), and several life changes.
I work with all kinds of innovators. Some are bootstrapping, some recently left their jobs to bootstrap, others are looking for funding, and some are already working with investors that believe in their idea.
I’ve learned that there’s no cookie-cutter way to build a company. That’s part of the challenge of building one. Each company has to find its own way to thrive. One solution won’t fit everyone.
From the beginning, I chose to be independent and to bootstrap my own business. It was a conscious choice. I always knew I wanted to have control over my company, at least in the beginning.
I have learned a lot.
I’ve learned that bootstrapping is not for everybody. Bootstrapping is for the fearless, for the adventurous, for those who trust their ideas so much they want to develop them on their own.
That’s why, as difficult it can seem to be, it’s also very satisfying.
But this is also why I can completely understand why some innovators don’t go the bootstrapping way. Bootstrapping is difficult. It will test you every step of the way and in ways you weren’t expecting. It will make you question what you’re doing and why.
It’s true that many companies can grow faster and stronger if they seek and get external funding, but as mentioned before, that’s also a strategy that won’t work for every kind of business. Plus it may not ultimately be the best long term strategy for a healthy company.
As much as bootstrapping will test you, it will also teach you. It will make you a better entrepreneur, and it will inspire you every day.
Here’s some of what I’ve learned in 20 years of bootstrapping 3 successful businesses.
What do you want to accomplish? Who do you want to help? Why are you doing what you’re doing?
My goal from the beginning has been to open access to innovators to change the world. My companies have evolved (the services too) but the goal has remained the same.
When I started my first company, I was working for a different (much more traditional) patent firm. Before I left, I spoke with my current clients and also potential new clients. I told them that I was starting a new patent firm which would work differently than existing firms. They effectively asked me why a different way of working would be good for them. They challenged me to explain why my mission would benefit them. They also wanted me to clarify what that mission was.
Sticking to your mission is important because it will help you guide your business and your team. When it’s clear what you’re working towards, everything is easier. But you also need to clearly communicate how your mission will benefit your clients.
Knowing your story and values will help you stay focused on what you want to accomplish.
A lot of bootstrappers come from the corporate world. This is great because working at corporate gives you an idea of how companies work from the inside. Even if you’re just a small cog in the machine, you can get a good idea of how a business works.
But, precisely because of that, you’ll be used to getting a salary, benefits, and, in general, not having to worry about how to run the company.
I’m not saying this to discourage you! I’m saying it because you’ll need to plan ahead.
Don’t quit abruptly and throw yourself into a new venture with no idea of how you’ll make it work. Have a plan. Save money. Learn as much as possible from your current job.
I worked at my old patent firm, for my old boss, for 4 years before I started my own business. I figured out what I liked (and didn’t) about the way the firm worked.
And did I mention saving money? Those savings really came in handy when I left my old steady job to go out on my own.
Plan how you’ll invest time in your side hustle before quitting. Plan to know when the right moment to quit your job will come.
Which leads me to the next point.
When the moment is right for you, quit and focus on the business you’re launching. It’s good to have a side hustle but it’s better to focus your time on making your own business grow. Not having another source of income will also motivate you to make your newly launched business work.
Plans are useful. Everybody knows that. But, especially if you’re starting a new business, you need to have something in place. Here are some ideas you might consider before starting your own business.
This plan can be flexible enough for you to change, evolve, and pivot, but it also has to give you a framework to follow..
Of course, a lot will be different, but trust me, having something written down will give you clarity to know what you’re doing next.
Also, having a plan will help you stay disciplined!
Well, of course. This is one of the downsides of bootstrapping. But it’s also an advantage, hear me out.
I remember a very young innovator I met that was able to get funding for his idea. It was a lot of money! He developed his idea as a college project, so when he suddenly had what looked like unlimited resources, he started hiring people, developing new products, investing in (unnecessary) marketing efforts, and trying to grow fast.
One year after VC funding, the company started losing money. His team became unmotivated. Everything went south.
We talked and he confessed that he didn’t have enough experience to run a business. He was suddenly put in a position where resources weren’t a problem, so that made him make decisions in a less thoughtful way.
When your resources are limited, you tend to solve problems more creatively (not just throwing money at them). Innovation will be part of your DNA because, when your own money is on the line, you try to innovate to cut costs while having good results.
Everything will have to be carefully thought out. How you’ll spend money, who you’ll hire, how you’ll make others notice your product.
When you’re bootstrapping there’s not a lot of space to fail, you need to make thoughtful decisions.
Thinking through everything you do is great for your business!
One of the reasons people look for investors and partners is that they can also bring experience to the business. Most of them are more seasoned entrepreneurs that can help you guide your team, your business, and the decisions you make.
But that can also be true for bootstrappers.
There are a lot of people you can consult or that can mentor you, without you having to give up part of your company. Of course, this might mean a bit of money. But, most of the time it’s cheaper and better to get help at the right time for the right tasks than to try to solve everything by yourself.
Also, consider that there are several tools out there that can simplify and automate different tasks in your business.
You don’t need to break the bank, you need to be smart about the tools you choose!
When bootstrapping, there’s no pressure to return money or to report back to investors. The only compromise is with yourself and your idea.
A big advantage is that you also have the liberty to pivot whenever you need to and whenever you want to!
When things become difficult, think that you’re building the company you want to build with the values you want and the culture you want.
There’s one truth about bootstrapping that you need to know and that applies to every company: you’ll have to work, hard.
But there’s also another truth. Nothing will be as satisfying as knowing that you were able to launch your idea, do it successfully, and build a business out of it.
Building the extraordinary takes guts. Start today!