3 Strategies To Help You Bootstrap Efficiently

Last week at our Delhi centre, we had the graduation ceremony of our March 2018, Startup Cohort. It was a felicitating moment for us and the entrepreneurs in the cohort, after having worked together for 4 months. The program consisted of everything from handholding, understanding their business requirements to challenging them and leading them to decisions to figure out what to do and what not to. Some of them were going to meet our investor partners to try raising funds for their organisations. To take on the uncertain road of the entrepreneurial journey ahead, we sent them out with a small case study of Zoho. A world-class company built by a founder from India while shunning the VC funding of any form. The Co-founder of Zoho, Sridhar Vembu calls himself a fan of bootstrap strategy and says it’s like starting at year minus five than zero and learning it by doing and making mistakes.

No matter what the strategy of the Startup is whether to Bootstrap or envision raising funds, every startup may go through the bootstrapping stage at some point of time, mostly first time founders or anyone who does not have enough funds to pump in initially. Bootstrapping comes with a set of pros and cons. However, Startups globally still follow this path either because there is no alternative route available or because of the control and independence it offers as compared to raising funding from external investors. Any Bootstrapped startup will value it for the quality of lessons it taught them and the feeling of being in control with their equity undiluted.

Bootstrapping in Business refers to building it out of very little or virtually nothing. Apple, Hewlett-Packard, Microsoft, Mailchimp or some other successful tech companies of 20th and 21st centuries were Bootstrapped by their founders. So what a Bootstrapper relies on is the personal income and savings, sweat equity, keeping the operating costs lowest possible, fast inventory turnaround and mostly Cash transactions.

So the thought here is to pick up few of the strategies to understand how to bootstrap:

  1. Identify & Validate

Well begun is half done. So when you start, identify and validate well. Ensure what you are building relates to a monetizable customer needs, calculate the size and demand of your target market. Create, test and refine your MVP to achieve your product market fit.

This will set the stage for successful bootstrapping.

  1. Careful spending and Cash flow positive

As money starts rolling in after a sizeable growth, it may let a bootstrap startup ease out on expenses. Zain Dhanani, CEO Of Tinsli says, “When every single expense is scrutinized, one must creatively find unconventional ways to solve complex problems and doing so builds the resourceful gritty mental habits required to build a successful company,”

So being financially responsible is the key. Strategize to achieve positive cash flow state. You can do this by bringing down customer acquisition costs and prioritize customer retention.

  1. Community building & Social Media Platforms

Look out to collaborate with the key players in your industry. Let the community know what your product or service has to offer. Further to harness the power of your community, leverage the free social media platforms but do gauge content going out.

One example of such a bootstrapped startup which used it well is the DIY community Hometalk. They used live and viral branded videos to gain 9000,000 followers on Pinterest in less than five years.

Leaving you here with the words of another advocate of bootstrapping, Ryan Mcquaid-CEO and co-founder of PlushCare. He explains “Bootstrapping might result in a slower growth curve, but it often results in a much better financial outcome down the road.”

So pull up yourself up by yourself – Bootstrap

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