by Ash Maurya, Founder of Spark59.com & Author of “Running Lean” 3/10 enhanced by Peter/CXO Wiz4biz
Bootstrapping & Lean Startups – while not the same thing, are quite complementary. Both cover techniques for building “low-burn rate” startups by eliminating waste through the maximization of existing resources first, before expending effort on the acquisition of new or external resources. While Bootstrapping provides a strategic roadmap for achieving sustainability through customer funding (ie, charging customers), Lean Startups provide a more tactical approach to achieving those goals through validated learning. But before going any further, I’d like to dispel some common mis-conceptions about both models:
Myth #1: Lean Startups are “cheap” Startups
I hear lots of people wrongly associate the word “lean” with “cheap”. This characterization isn’t entirely misguided, but it only captures a sliver of what being “lean” means. The term “Lean” comes from “Lean Manufacturing”.
Being “lean” is not about being “cheap” but being efficient with resources..Money is just one of those resources and there is a time to conserve spending (before product/market fit) and a time to spend (after product/market fit).
Myth #2: Bootstrapped Startups “never” raise money. Most bootstrapped startups start with some form of initial self-funding (sweat equity, credit cards, savings, etc.) and work their way towards sustainability through customer-acquired funding. However, given the type & stage of the business, even bootstrapped companies can – and often do – choose to raise additional capital if that’s what’s needed for growth.
Right Action, Right Time.
I’ve bootstrapped my company for the last 7 years and learnt a lot about bootstrapping from the Bootstrap Swami, in Austin. He doesn’t limit the definition of bootstrapping to the more commonly held one about “Building a company without external funding” but rather views bootstrapping as a philosophy summarized as “Right Action, Right Time”. This mantra applies just as well to lean startups as it does to bootstrapping:
[ Right Action, Right Time continued, Pre-Mature Funding, 3 Stages of Growth, getting Funded in Premium Content ]