by Philip Acuña
Having the next brilliant idea for a product or a service is just one, very small, aspect of being an entrepreneur. The real work actually comes when you want to turn that idea into something that not only benefits customers, but also brings in revenue. Some startup founders turn to accelerators or angel investors for guidance and financial backing, but with this comes the sacrifice of independence and equity.
An increasing number of entrepreneurs are choosing to max out their credit cards, turn their homes into workspaces and hunker down for a long, often painful – but sometimes blissfully rewarding – foray into starting their own business. Bootstrapping, as it has been dubbed, isn’t easy and more often than not, startups do not succeed. However, those with a true passion for their business are able to persevere, and with each obstacle encountered, they grow.
For more personal insight into what it’s like to bootstrap your startup, here’s some advice from startup founders who have gone through the gauntlet and survived.
1. Budget is King.
“Make sure you know exactly how long you can last without external investment/before revenue. Do a month-by-month spreadsheet including all spending, both business and personal, and multiply whatever number you get by 1.5, as this will put you on the safe side. In business you will generally spend more than you initially think!”
“You need to get your priorities straight. Since you work with limited funds, prioritizing development is fundamental to get a product out fast, without losing time by building non-essential but nice-to-have features. It can be quite tempting to tweak a product over and over again, especially if it is your brainchild, but doing so wastes a lot of time that is better spent on more important tasks.”
3. Master Your Pitch.
“Make a killer pitch, highlighting the product, value proposition(s), and market opportunity. Prototype your product and make it come to life (through Sketch). It is crucial to test your pitch amongst highly critical colleagues and friends, and use that feedback to tweak your proposition.”
4. Take On Investors On Your Terms.
“It is very important that startup founder consider not only the costs of creating their product, but also all the external costs, so that there will there be enough runway to take on investors. When a bootstrapped startup decides to take on investors, it should be for the right reasons, such as expanding their business, or receiving mentorship and guidance. Startup founders should never put themselves in the position where they have to take on investors because they are on the verge of bankruptcy and don’t have a choice.”
5. Persevere – Help Is On The Way.
“The most significant trend that will soon be taking place is the democratization of the funding process for startups. Instead of a few thousand VC’s around the world deciding on which companies get funding, global individual investors will gather together to invest in startups. The ‘wisdom of the crowd’, will soon be deciding what businesses get funded. For those that are bootstrapping their startups, my advice is to persevere, since there will soon be a lot of new funding options available.”
Philip Acuña is a journalist and PR strategist based in Medellin, Colombia. He has previously worked for organizations including the California Immigrant Policy Center and Colombia Reports.