As with everything, there’s the good and the bad, but let’s start with the good stuff. Why do bootstrappers love doing business this way? What can you expect from choosing this path? Here we give you 4 of the most important reasons directly from our experienced and successful entrepreneurs.
1. You don’t need anyone else believing in your business
When you bootstrap, you don’t need to convince anyone else but your customers. How often do we hear those stories from investors passing away from great opportunities? How many entrepreneurs that today are considered leaders and role models have been rejected until they finally made it?
“We spent more than a year looking for investors for MailerLite, but email marketing wasn’t a sexy topic. Our drag-n-drop editor didn’t change the world. Meetings with investors were quite demotivating, they saw email as a dead medium. So we had to bootstrap our business”, says Ilma.
Having to convince investors can be really daunting if you don’t have a billion-dollar idea, but you can take all that pressure off of yourself to put it into creating a great product your own way, in your own time.
“I came to understand the way VC’s work. That ‘go big or go home’ mentality where having a valuation of 10 million dollars is considered a failure… it’s weird and stressful world”, says Ariel. Sometimes, fame is not worth it. After all, the market will be the only one judging.
2. You don’t need a “successful” tracking record
“Before SalesQL I’ve tried to start other software companies looking for being accepted in an accelerator or an incubator, but it’s hard when you don’t have a successful tracking record or you are a solo founder…”, says Ariel.
Since only 10% of companies will succeed, VC’s must minimise the risk of their investments (can you blame them?). It’s understandable that they raise the bar and choose founders with proven records and experience.
However, being an experienced entrepreneur has its setbacks: when you already have your method on how to do things, you’re less likely to risk it innovating.
Once again…Their math is correct and certainly works for them, but it doesn’t need to stop you. Go ask Mark Zuckerberg, Bill Gates, or Steve Jobs for previous experience when they were just starting.
3. You get the freedom to do exactly what you want
When you have investors, it’s not just money you accept. You’re also allowing them to have a say in the direction you’re giving to your start-up and if you can’t handle managing their level of involvement, you can lose focus from your vision.
Bootstrapping means doing business your way caring about what matters to you, but most importantly, to your customers.
“No one tells what to do and how to grow your business. You can try everything you want, trust your intuition, invest in long-term projects or into projects that you are passionate about. You grow and create a company and culture according to your values”, explains Ilma.
4. You don’t need 2 million dollars to start your company
“The Octopush project started in June 2011 during a dinner with Yoni, my partner. He’d developed a solution to send bulk-sms, invested €300 in advertising with Google Ads and generated €3,000 in sales”, tells Jean-carl.
Many bootstrapped companies share a similar origin: they begin by solving a very specific problem and once they find product-market fit, they start scaling. The truth is that a small initial investment used wisely can get you very far, and contrary to the common belief, bootstrapping a company is not only for small or side businesses.
What are the Downsides?
Building a business is always challenging whether you’re funded or bootstrapped. There will be thousands of roadblocks, but here we list the top three for our bootstrappers.
You are on your own…
“… and there’s no one to blame for poor results and bad choices. Moreover, you don’t have much experience and there’s no advisor board to help you make the decision or connect you with someone big in the market”, says Ilma.
Remember we mentioned that when you’re funded it’s not just money you accept? Well, it also comes with important connections, mentors, and advisors that you’ll have to get on your own if you’re bootstrapping.
However, one of the things all founders can count on is finding a community.
“It’s a lonely way and you need a lot of resilience. It’s hard to find a local community or resources for bootstrappers. Fortunately, this has been improving a lot in the last few years”, says Ariel.
Devashish, for example, found a turnaround to that lack of mentorship in regularly meeting with founders to share their problems and learn from each other. “Often the problems that one person is facing are already solved by some other founders in their own start-ups, and their input helps in solving problems fast”, he explains.
Not a lot of love from the media
“In my opinion, the main disadvantage is that the media isn’t interested in bootstrapped companies. They prefer fundraising because in the collective unconsciousness, raising money is a sign of success”, says Jean-carl. Somehow bootstrapped start-ups are not as mainstream as funded ones, and that lack of press might make it a bit more difficult to let word of mouth rolling.
But that doesn’t mean you can’t create it yourself. One of those examples is Guillaume Moubeche, founder of the sales automation software called lemlist, who a few months ago created a campaign pretending a fake round of investment that ended up with them turning down a real offer for 30 million dollars. All this to prove a point: you don’t need millions to succeed.
You’re always on a budget
While you don’t need millions, money can definitely make things easier. “Not having enough money for experimentation can sometimes restrict the growth, but a benefit we got from it is that we focused on getting organic traffic from the start”, says Devashish.
Also, having cash can also give you the freedom to hire a team to delegate tasks to, and held accountable by -especially if you’re on this journey solo. “It’s hard when you’re a solo founder, you don’t have resources and you have to do everything, from doing support calls to designing the UI. At the beginning it was very hard”, says Ariel.
