Honestly, nothing can make you feel anything even close to running a bootstrapped startup. Most have plans based on their extremely limited budget and choose to stay cash positive until they get stable customers.
But there are things that can be learned well before you do from experience. Since it’s generally not the time to lose all your money on costly mistakes, here are 10 things you can do to bootstrap your startup.
- Startups can survive their initial years by effective bootstrapping
- Networking is key to getting key business resources without spending much
- Marketing and branding are powerful tools to get initial customers
- Build an MVP as quickly as possible
- Track everything
1. Start offering your service
You may have already checked out this option if you are short of cash. Most startups start with nothing, and that’s ok. To get things started, you can sell your key skills as services to raise a seed fund.
Platforms like Upwork and TopTal respect top talents and offer a varied pool of clients to work with. Freelancing platforms are just one way to start raising your funds for the future. Consulting your expertise with other startups is another way of raising funds and authority in your domain.
Having a good name that you could leverage for your startup is perhaps the best move forward when there’s a drought of funds. Consulting is probably the best way to get to know other startups and their challenges along the way.
Learning about startups and their challenges will help you better prepare for your undertakings. Selling your services, thus naturally allows you to pitch to multiple clients and better your communication and negotiation skills.
2. Get a good co-founder
Dealing with the full force of a scalable startup opportunity is arduous labor. While it’s up to you to choose to do it alone, having a co-founder could ease your pressure and maintain your sanity for much longer.
Finding the right co-founder can make or break your bootstrapped startup. A partner with complementary skills compared to you and who can handle a different part of your business can help you focus on your strengths more.
Understanding burn rate, finding better opportunities, and even having an ear to understand complex issues are crucial for any startup.
Having someone to share this responsibility opens up room to handle more interesting tasks and could help you get a different perspective on the business.
While it’s common to have long-standing friends as cofounders, it’s important to know that you are legally bound to another person in terms of company matters, so choose wisely. There are other ways to find co-founders too.
Platforms like CoFoundersLab have a long list of candidates with the widest range of skills to choose from. Whatever the case, it’s always better to keep networking and meet new people whose ideas align with yours.
Take a look at the best networking apps for startup entrepreneurs.
3. Always get mentor support to bootstrap your startup
Cultivating a network of mentors and advisors is one of the best things about running a startup. You quickly realize you don’t have to be the ‘all-knowing’ to succeed.
While bootstrapping your startup, it’s also necessary to differentiate between getting casual advice over coffee and consulting about real-world business scenarios from a paid consultant.
Having a mentor can improve your high-level perspective about how to run your business, while consultants can help you prioritize your day-to-day realities. So understanding what you’re getting from each of them is very important.
Being a bootstrapped startup owner can feel like a lonely journey with the whole world working against you. One thing that you must ensure is to have a community of startups around you and get regular feedback from mentors on your progress. More than just the financial incentives of having a consultant, getting expert help also trains you to perform better under pressure.
Finally, it’s always better to reach out to other startups and talk to them in person. Most of them have the same worries and challenges as you, even if they are funded, and would love to share their story. This could be incredibly insightful for you in the long run as you learn to adapt to the startup environment.
Do you know the most repeated mistakes by a young entrepreneur? If not, read on here.
4. Outsource only when needed
Outsourcing is a great option when you are aware of your limitations. This includes skill, money, and time. While bootstrapping, knowing what’s essential to your customers is important. If a UI upgrade is what the customer so dearly needs, get a UI developer to solve the particular issue.
One great thing about outsourcing is that skilled professionals can solve any problem for a nominal fee. The problem is whether you are solving the right problem. Often, outsourcing is taken up because you need to finish things on time or get more quality work done.
The best way to check whether your problem requires outsourcing is to understand where your product is at any given moment. Think of maximizing user satisfaction and the least you could do to get there.
At NeoITO, we regularly consult with startups on their best course of action and also help them develop market-beating products. To know more about how we help our people, check out our complete range of services.
5. Know your expenses
The biggest impediment while bootstrapping is the limited funds and the volatility of it as needs mount over each other. So many things seem pursuable and immediate, but it’s important to know what can actually bring revenue and what’s vanity.
Analyzing funds from a revenue standpoint is crucial when you bootstrap your startup. Everything that can’t be used to create revenue soon can be put on hold at the moment. You’ll know what’s relevant to your business fairly soon as you do not have the luxury of external funding.
If you have subscriptions or have hired a couple of consultants to better your efforts, ensure that your profit and loss statement always looks healthy. Organizing and prioritizing your work will be crucial for financial stability while bootstrapping.
Although you may find many finance gurus on the internet, it’s better to spend some time and money on qualified professionals to consult on your financial health periodically. This would also help you understand the accounting part of it much better. And the sooner you understand your numbers, the better.
6. Build your Brand
Just like how first impressions matter, so does your business’s branding. It’s understandable that you may be short on cash while bootstrapping, trying to create a coherent picture of what you do to your clients/users is important for long-term success.
Now that you know how brands affect how users interact with your business, there’s another crucial benefit of having a prominent brand voice. Top talents and companies try to determine your value based on your brand outlook. It’s advantageous in the long run to have a good branding strategy to help in hiring, further consultation, and even international work.
Funding can also be an issue here, so trying freelancing websites is your best move forward. Your website or brand voice can be developed with some help from consultants while not depleting your funds.
Growing brand advocates organically through customers is every business’s dream. This requires an honest review of what defines your brand and conveying it clearly across multiple channels. With a coherent brand in place, your efforts can now be streamlined for maximum effect and results can be tied to your brand values.
7. Content marketing
Conveying your brand to people takes much more effort than developing it. This is also where you can cut costs significantly and still grow your brand without much effort. As a startup CEO, you can start by sharing your experiences and progress in running your startup.
Brands that are transparent about their operations and are willing to share their stories create a sense of community among potential customers. This is why it is essential to have a content strategy to let your people know where you are right now and how well you are solving user problems.
From an AIDA (Attention Interest Decision Action) model standpoint, the initial content you put out will help your customers gain awareness about your product. As your offerings get more aligned to user requirements, they generate interest and you start to attract a following. It’s only when they understand your product and decide that it’s time for adoption that they actually buy from you.
So having a constant presence in your user’s minds is the best you can do to ensure future sales. With coherent content, you’ll develop expectations from your users, which is good for educating them even more about your product/service.
You could even try platforms like Patreon to create in-depth content to generate paid subscribers. Subscribers are usually the early adopters for your MVP and their suggestions will be honest too. Thus, getting the word out should be a top priority.
8. Create an MVP asap
There’s nothing more important to a fledgling startup than to validate its idea with its target market and potential investors. Developing a Minimum Viable Product (MVP) is perhaps the best use of funds any startup could undertake in its early days.
It’s important to iterate and fail fast while bootstrapping, as the losses now will be lesser when compared to losing heavily after introducing your product to the market. Contrary to popular belief, an MVP doesn’t even have to be the basic version of the product even. Anything that could easily convey the benefits and key services that your idea may provide can come under MVPs.
It could be a video, a landing page, or even a static website where you can collect user feedback and perfect your product. Although there aren’t many fail-safe methods to run any startup, you can still get enough user information and make your decision.
Feedback and revenue are the two things you need to focus on now, and it’s better to have the basic version first. With enough feedback, you can slowly add features and even pivot to something that customers value, not what you started with.
9. Track your progress
Explore your business thoroughly and find key metrics that you can use to measure your progress. Finding them would be a huge task initially, but understanding what’s important to your business’s success can help you see what numbers matter and what doesn’t.
More than just tracking numbers, it’s imperative that you set goals for each quarter and narrow down your list of tasks into manageable chunks. Doing this lets you understand how much leeway you may have with your bootstrapped fund and prioritize tasks for maximum efficiency.
Whale tracking numbers for your startup, try not to get confused by vanity metrics that never tell you anything about your growth. The number of followers you have on social media, the number of feedback you have on Playstore, etc are exactly the ones you need to keep away from.
Focus on metrics that indicate conversion and customer lifetime values. Everything else can wait for now, as these metrics give you a clear picture and can even indicate any deficiencies in your efforts.
10. Know your users and be with them
Realizing that every valid startup solves a user problem can’t be stressed enough. Therefore, understanding your user and caring for them would be the most important thing you can do towards success.
Don Norman’s design of everyday things makes a case for prioritizing user experience over everything else. Startups should constantly be in touch with customers and see how they respond to the changes they make to your product.
However small they might be, try to think from a user’s perspective to figure out what urgent need you are solving for your user. They might not even care for the color theme of your UI so much so as the quickness in getting the service you offer.
When thinking of user feedback, you can also deduct insights through primary and secondary research. Primary research includes personal interviews, surveys, and meetups to learn more about the experiences users had. Secondary research involves gathering insights from social media from customers who have tried your product or service.
Suggested read: How to perform a thorough market research
Staying consistent in your efforts and working hard are inevitable for success, but it’s doubly so for a budding startup. With so much uncertainty, the only logical step you can take is to convert everything into manageable steps. Understanding every project or procedure as a set of finite steps with a beginning and a due date can simplify your workflow.
Bootstraps have advantages and disadvantages, but the decision also takes into consideration your current economic situation and your need to fulfill your vision as quickly as possible. This is where bootstrapping becomes a boon for some and a risky option for others.
We have helped a range of people to begin and work within their means and helped them run stable startups in the last couple of years. If you’d like to talk to us about how to improve your startup, talk to us today!