by Garrett Moon
My startup recently launched its third major product – CoSchedule, a social media editorial calendar for WordPress. It is our best release, though hopefully not our last. You see, we are a bootstrapped company with $0 in outside funding, and we are located in the middle of nowhere. Does that sound familiar?
What does it take to launch a startup on your own dime, and in your own backyard? I want to dispel some of the common misconceptions about bootstrapping, and share some practical advice about using this method for your own startup.
Reality #1, You Still Need Money
Bootstrapping doesn’t mean “free” startup. It will always cost you something. All it really means is that you are going to be responsible for raising your own cash without the help of a venture capitalist. You still need money when you bootstrap, you just need to go about it in a different way. There are a few common scenarios.
100% self funded – This is the best case scenario, and describes a situation where you use your own cash reserves to pay salaries and fund project costs. This is hard to come by.
A side business – My business partner and I started our company by putting $150 in the pot, but we didn’t jump straight into product mode. We built a small service-based company that would allow us to grow a team and launch a product-based startup. This is not an easy road because you essentially start two businesses.
The day job – A common scenario is to hold a side job while working on a product in the evening. There are a lot of pitfalls with this method, including the struggle to find the time to get the work done. The biggest problem, however, is that when you are funded by a full time job you aren’t required to make hard decisions. You can easily waffle in your corporate hammock, and that can be a death trap for your business. 100 percent focus is required to truly get something off the ground, and I found that focus to be a major struggle when I attempted this method. It is my least favorite, but it can be necessary.
You live on nothing – You build, you launch, you pray, and live on nothing but beans and rice. If you can swing it, do it. Nothing fuels progress like hunger.
Beg, borrow, and steal – There are a lot of stories out there about borrowing cash from friends and relatives. I am not a big fan of this, nor have I done it. I simply don’t want the people I love financing my mistakes.
Reality #2, This Is Going To Take All Of Your Time
One of the most difficult aspects of bootstrapping is that you continually have to spend time worrying about funding. In almost all of the scenarios listed above, the entrepreneur has two jobs. A great side project always makes concentration on the day job difficult. It won’t be easy to maintain the two, and to keep that 100 percent focus.
Bootstrappers have to be ready to commit to working 200 percent more than everyone else. During my early days, we had something called the “Scriply shift” (named after our first product). This shift took place after putting in a full day at our ‘day jobs’ and happened between the hours of 10 p.m. and 3 a.m. I’m not going to lie: we looked like terrible and were tired all the time. But we did get a ton of code written.
Reality #3, Speed Of Development Is Your Danger-Zone, Not Money
Before founders start a business, they worry a lot about money. Money is a big deal, that’s true, but it isn’t the biggest risk for most bootstrapped ventures. My co-founder and I always joke that in the beginning, startups run on dreams and sweat, not money.
For a bootstrapped startup, the speed at which you can build and iterate is your number one risk. Stop sleeping and learn to love coffee. You have to go after it like you mean it. Intensity counts. I’ve often found that those who are most likely to succeed are those who are most likely to do whatever it takes to make it happen. Don’t be afraid to put on the entrepreneurial hustle when necessary.
Reality #4, You Can’t Do It Alone
The number one benefit of bootstrapping is that you own the whole enchilada. You have full control over your idea. If you don’t have a co-founder, get one. You will need someone to bounce ideas off as you go along, because, as they say, iron sharpens iron. If you don’t have a co-founder, consider a group of advisors or mentors. It will go a long way in your success. Trust me, you can’t do it alone!
Garrett Moon is a founder and designer at Todaymade, makers of CoSchedule, a content marketing editorial calendar for WordPress. His startup is in the wrong city.