The Biggest Lessons Learned from Bootstrapping a Startup

The Biggest Lessons Learned from Bootstrapping

Many of us are faced with bootstrapping our own startup.

But, let’s face it…

Without a roadmap or knowing which path to take to lead to our success, we often make decisions and learns things the hard way, through “trial and error”. While bootstrapping a startup is no science, there have been several people who have gone before us that have managed to find their own way to achieving success.

I recently reached out to some of my fellow entrepreneurs and bootstrapping success stories I had read about, as I was keen to get their thoughts on the lessons and experiences that helped make them successful.

So, I posed the following “fill in the blank” question…

The biggest lesson I’ve learned from bootstrapping a startup is __________

I was overwhelmed by the response and quite encouraged to hear similar lessons with my own startup experience. Read on further to see what each of these people had to share.

Then, I’d love to hear from you what you’ve learned in the comments below.

Here’s a list of shortcuts to each answer or you can scroll down to read through all the answers (trust me, you’ll want to read them all):

George Achilleos, Corbett Barr, Jeff Butterworth, Devesh Dwivedi, Brad Feld,
Pat Flynn, Brian Gardner, Jay Gibb, Chris Guillebeau, Colin Holowaychuk,
Guy Kawasaki, Andre Kroecher, Matt Mickiewicz, Justin Nowak, Neil Patel,
Nathan Seidle, Lori Stewart, Zachary Vex, Andrew Warner, Carla Young

 

George Achilleos

Co-Founder at Out There Inc. and LiveOutThere.com

George Achilleos

Be ready to “pivot” and take the time to prioritize your focus list.

I have found that the idea at the start is not necessarily the “success” idea in the end. LiveOutThere.com started with a “social” lead and made a dramatic pivot to e-commerce. What we thought would work was wrong and we needed to have the courage to change.

Second bootstrapping is about focus and prioritization. The startup phase can be exciting and entrepreneurs spend time on “non-important” activities – making business cards, spending time coming up with fancy taglines etc…, however, there are much more important things to focus on. What will drive revenue? What will build momentum that will get you past the inevitable point of discouragement? That is where focus should be.

Follow George on Twitter or learn more at Live Out There

 

Corbett Barr

Entrepreneur and Founder of Think Traffic

Corbett Barr

Building an audience first before developing a product is a more powerful and less risky way to build a business.

Follow Corbett on Twitter or learn more at Think Traffic

 

Jeff Butterworth

Queen Bee at Alien Skin Software

Jeff Butterworth

Founders should have the skills to make the product themselves. Most bootstrappers don’t have enough money to hire engineers. Even if they do, the product will be better if the founders’ vision is directly poured into it rather than translated by someone else.

Follow Jeff on Twitter or learn more at Alien Skin Software

 

Devesh Dwivedi

Startup Mentor, Blogger at Breaking the 9 to 5 Jail

Devesh Dwivedi

Spend very very wisely because there was no cash to cover up mistakes and every dollar was critical to survival so, as they say – measure twice, cut once.

Plus remember, Bootstrapping is not about Skype versus Landline; it’s about being open to untraditional, innovative, & cost effective ways of solving problems and getting things done.

Follow Devesh on Twitter or learn more at Breaking the 9 to 5 Jail

 

Brad Feld

Managing Director at Foundry Group, Blogger at Feld Thoughts

Brad Feld

Never run out of money

Follow Brad on Twitter or learn more at Foundry Group and Feld Thoughts

 

Pat Flynn

Entrepreneuer and Blogger at Smart Passive Income

Pat Flynn

Just how many ups and downs there are. One day I’ll be incredibly happy with the way things are going, and the next, something will happen and it’ll seem like I’m at the bottom, often times wanting to just give up. When we’re down, it’s easy to forget that there are ups too – ups that we’ve experienced that are important to remember, and ups that will happen if we just keep going.

Follow Pat on Twitter or learn more at Smart Passive Income

 

Brian Gardner

Creator of StudioPress, Partner at Copyblogger Media

Brian Gardner

Bootstrapping is the only way to go since you can retain full ownership in your company and you don’t have to answer to investors when making decisions.

Follow Brian on Twitter or learn more at Brian Gardner and Copyblogger Media

 

Jay Gibb

Founder of CloudSponge, Managing Partner at Arizona Bay Technology Ventures

Jay Gibb

Saying “no” more often than I say “yes” is critically important. It’s difficult to say “no” to ideas and requests from customers, shareholders, advisors, teammates and myself, but it’s the only way to get momentum during the budget-sensitive bootstrapping period.

Follow Jay on Twitter or learn more at CloudSponge and Arizona Bay

 

Chris Guillebeau

World Traveler, Entrepreneur, Best-Selling Author, Blogger at The Art of Non-Conformity

Chris Guillebeau

Starting a business on the cheap is a benefit, not a handicap. You’ll gain more by spending less money and using more of your brain.

Follow Chris on Twitter or learn more at The Art of Non-Conformity

 

Colin Holowaychuk

Founder of Merchee

Colin Holowaychuk

Focus on the end goal, it’s hard to filter out all the distractions.

– or as Gary V says “all the other bullshit is horse shit”

Follow Colin on Twitter or learn more at Merchee

 

Guy Kawasaki

Best-Selling Author, Technology Evangelist and Founder of Alltop

Guy Kawasaki

Too much money can be deadlier than too little money

Follow Guy on Twitter or learn more at Alltop.com

 

Andre Kroecher

Inventor of Dairy Free Vegan Cheese

Andre Kroecher

Well, to me, bootstrapping implies “no help” achieving an impossible task on one’s own, generally. I was fortunate to have selected a business partner to pull half the load, one who has smarts in areas I don’t. So I would probably say, self-reflect and recognize one’s own strengths and weaknesses, then surround oneself with people who excel where you don’t.

Follow Andre on Twitter or learn more at Daiya Foods

 

Matt Mickiewicz

Serial Entrepreneur, Co-Founder of 99designs, SitePoint, and Flippa

Matt Mickiewicz

Be aggressive with pricing & margins. Customers might be willing to pay a lot more than you think.

Follow Matt on Twitter or learn more at 99designs, SitePoint or Flippa

 

Justin Nowak

Startup Weekend Calgary Organizer and Blogger at Young Go Getter

Justin Nowak

Learning how to barter and negotiate to get what you need!

Follow Justin on Twitter or learn more at Young Go Getter

 

Neil Patel

Co-founder of Crazy Egg and Kissmetrics, Blogger at Quick Sprout

Neil Patel

Start making money from day 1

Follow Neil on Twitter or learn more at Crazy Egg, KISSmetrics or Quick Sprout

 

Nathan Seidle

Founder of SparkFun Electronics

Nathan Seidle

The fine art of the shell game. Business
types call it ‘cash flow projections’ but to me, it’s the idea that I’ve got to manage the cash of my business well enough to pay off the credit cards at the end of every month. For years if I added up all I owed against how much money I had in the bank, it was red. But I always had enough incoming money to pay off the credit cards when they came do. I’d then ask the credit card company for an increase in my limit then get back to growing my business. A line of credit certainly helps as a pressure release valve. And the eventual goal is to have more money in the bank than we owed. We’ve happily made it, but now we’ve grown to a size where I’ve had to learn the different between ‘cash accounting’ and ‘accrual’. Don’t worry if you’re just starting out – you’ll learn what accrual is when you need to.

This ‘fine art of the shell game’ teaches some good lessons in and of itself. When choosing whether or not we should purchase something (a new computer, a used desk, etc) we always looked to see if we had the cash. Some folks would call this ‘cash accounting’ but to me it was a good way to force ourselves to be scrappy. We were have remained very healthy because of it.

Follow Nathan on Twitter or learn more at SparkFun Electronics

 

Lori Stewart

eCommerce Executive and Founder of Awesome Foundation Calgary

Lori Stewart

Focus completely and absolutely on solving a defined market need, rather than building a cool solution for a non-existent market problem.

Follow Lori on Twitter or learn more at eThor and Awesome Foundation Calgary

 

Zachary Vex

Inventor of Z.VEX Guitar Effects and Amps

Zachary Vex

Don’t be afraid to be weird

Follow Zachary on Twitter or learn more at Z.VEX Effects

 

Andrew Warner

Serial Entrepreneur, Host of Mixergy.com

Andrew Warner

Boostrapping forces me to make sure I know what my customers want before I create it.

We always see heavily-funded startups in the news because they have enough money to pay for PR people, but there are bootstrappers out there who are quietly building profitable companies that are changing the world. Glad Blair’s site will help them.

Follow Andrew on Twitter or learn more at Mixergy.com

 

Carla Young

Writer and Founder of MOMeo Magazine

Carla Young

Spend money wisely. Look for no-cost ways to get the ball rolling before you invest in developing infrastructure that will likely need to change within the first year as your business evolves.

Follow Carla on Twitter or learn more at MOMeo Magazine for Work-at-Home Moms

 

***
Now, it’s over to you…

What’s the biggest lesson you’ve learned from bootstrapping a startup?

I’ve love to hear from you! Leave a comment below to share your experience.

Comments

  1. I’ve learned to be more resourceful and creative by bootstrapping my own business. I also value my time, supplies and clients more because my heart and soul are invested, not just my money.

    This is a great resource Blair! Thanks for putting in the time to ask this important question and share the answers from some outstanding entrepreneurs. Awesome stuff!

    • Hey Carrie, thanks for sharing! Yes, investing more than just your money is what bootstrapping is all about!

  2. It’s interesting that Corbett’s advice and Neil’s advice are a little bit contradictory!

    I’m not sure what my biggest lesson learned is so far. I’m much more willing to invest hundreds of hours of my time than actual $$. The hardest part is knowing where and how much to invest in customer/lead acquisition, because every time I try to make projections (“OK, about 1.5% of these should convert to paying customers…”) they end up being inaccurate.

    • Thanks Shayna for sharing your input.

      I think out of context, these two comments my seem to be a bit contradictory. However, I’d like to think these both could actually quite compliment each other when combined together. In order to make revenue from day one, you’re going to need customers to buy from you. It’s probably safe to assume “day 1″ would be from launch and that there’s an assumed lead time to build up to launch.

      Good on you for setting goals and targets for customer/lead conversions! Even though you may not achieve these goals right away, sounds like you’re on the right track if you’re already measuring what’s working, what’s not working.

      B

  3. I like Pat Flynn’s quote- very encouraging!

  4. First, kudos on that list. It’s great to read all of the perspectives!

    There are two that I have to add to the great list that you’ve put together:

    1. Have someone off of whom you can bounce your ideas, thoughts, concerns, and fears. It’s lonely at the top, so form a network of people who are going through or have gone through the same thing that you have.

    2. Know when to say when. While funding your business through your credit card can help you with the shell game, at some point, you are probably chasing a dream that won’t work. Commit up front how much money you’ll commit to your startup, and if that day comes, then cut it off. You can always come up with more ideas if the first one didn’t work, but if you dig yourself too deep of a hole, it’ll be a long, long time before you get a chance to implement the next one. Just as George Washington never committed his army to a battle where he could lose it, you have to learn the value of a strategic retreat.

    • Hi Jason

      Great insights shared here, especially #2 you shared. Don’t know how many times I’ve heard of people being persistent about a dream that will never make it to reality.

      We’ll talk more about customer validation more in a few upcoming posts, so stay tuned!

      Thanks for stopping by!
      B

  5. Penny pinch.
    Do it yourself , make em work pro bono or hire on contract basis. Free load (managed to get windows azure hosting free for a year), avoid high rent(incubator or work from home) keep ur other income sources as long as you possibly can (day job) and make money from day 1.

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