Being “Boot-Scrappy” – Why most Startups should start with Bootstrapping
from GigaCom.com 05/13 enhanced by Peter/CXO Wiz4biz
Summary: Many of today’s startups are obsessed with figuring out the best way to get Investors. But for many companies, Bootstrapping might result in a better product and a healthier business in the long run.
Funding vs Bootstrapping. Is the current system for funding startups is really the best route to building lasting companies? Some even believe that the funding-driven mindset of Silicon Valley is toxic. I couldn’t agree more. Which is why, other than some modest help, we opted to not pursue investors for our company and go it alone instead. I’m convinced that for a lot of startups (though certainly not all) choosing to bootstrap instead of searching out VC money is the better strategy for a number of reasons.
Focus on pleasing Customers, not Investors. When you don’t have a lot of money, you’re forced to turn to the funding source that rarely tolerates mistakes: Customers. Specifically, focusing on the product results in the creation of a “minimal viable product,” a pared-down, core offering that delivers a clear value to customers. And if all of your efforts are focused on designing a product that Customers want, enjoy, or find useful, you’ve got a much better chance at success than someone who’s focused instead on convincing Investors that the business will be viable one day.
Skeptical? Companies like SquareSpace, WuFoo, Braintree, Lynda.com, 37 Signals, Campaign Monitor, Github, and many more were able to become successful without relying on traditional rounds of funding. And we built our company, Bizness Apps (from the ground up), without any significant outside funding (and we not only turned out just fine, we’re also profitable).
Both ??? Now, that’s not to say that a business can’t chase both Customers & Investors at the same time, as clearly many successful companies have done just that. But in our opinion, it can be harmful to worry about what Investors think when you should be worried about customers, who are a much more sustainable & important funding source.
[ Benefits of Lack of $$, Urgency inspires Efficiency !!! Enforcing Discipline & Accountability + Examples in Premium Content ]