by Josh Ziering
The economic climate has made it more difficult than ever to raise money, and if you raise enough money to build your idea, you may fall victim to the “Series A Crunch” and not be able to raise additional funding. There has never been a better time to bootstrap your startup than right now. By reducing costs, generating revenue, and building a functional product you help eliminate risk in the eyes of a potential investor. The result is that you’ll get more money for less equity than if you showed up with just an idea.
Here are 3 tips for bootstrapping your startup and staying lean while you’re working towards that first dollar:
1. Reduce Ops Costs
Overhead can be a crushing weight to work under. Make sure you’re staying as lean as possible while you’re building your business. This means not buying 12 servers “in case you get press coverage.” You’ll want to make sure you can scale quickly, but stay small. In the past, I’ve used these tools to help me go from little to big:
- CloudFlare – CloudFlare is a managed DNS system that also blocks attackers, DDOS, and caches frequently accessed parts of your site. They have an easy to use interface and if your site happens to see a huge surge in traffic, their caching layer will act as a buffer while you scale up your resources behind the scenes.
- Google Apps – Not only will this let you easily access your email from your mobile device, add and delete users, and add aliases like Press@, but it only costs $5/month for each user. Whether you’re going to be a team of 100, or a team of 1, email is too critical to a growing business not to have it up and functioning at the level of reliability that Google can offer.
- Shopify With Stripe – The conventional path to selling something online means paying someone to build you a website, and then getting a merchant account and a payment processor. The barrier to entry for all of those things, even with poor implementation, can be tens of thousands of dollars. Instead, consider using Shopify, a hosted e-commerce platform with a variety of templates. You can have your site setup in just a few hours, and with Stripe, you can accept payments instantly with no setup fee, no monthly fee, and just 2.9% and .30c per transaction.
2. Find The Shortest Path To The Money
It’s easy to get lost in a lot of ideas when you’re first starting out. Having a focus on the first dollar of revenue will help you separate what’s critical from what’s not. As soon as you have some revenue, solving the other issues becomes a lot easier, and you can leverage your time better. Until then, keep a laser beam focus on generating revenue.
3. Don’t Be Afraid To Get Creative
When you’re first starting, solutions may not present themselves very readily. For a time, my brother and I owned a hat business, but the hats were really hard to come by. One time we ran so low on stock we thought we might have to shutter the website until we could get more product. Instead, my brother got in the car and drove to a warehouse in California, and back, to make sure we had hats for the website. Don’t be afraid to find a creative solution if your back is against the wall.
Josh Ziering is the Director of Marketing for FutureAdvisor, an unbiased financial advisor. Previously, he was a partner at Vuurr, a digital marketing agency. In the last 10 years he’s bootstrapped several successful businesses using this minimalist approach, and a lot of hard work.