Bootstrap is a word that every startup employee should know and be aware of. You should know about bootstrap if you are working in a startup where is no funding involved in your company from investors. Let’s understand
Who are Boot Strappers?
For the most part, they are just like you and me. The major difference between successful bootstrappers and you is this. They take action with their ideas. They don’t overthink, overanalyze, or wait for the “perfect” time to bring their ideas to market.
A vision without action is just a daydream
Bootstrapping is building a company from the ground up with nothing but personal savings, and with luck, the cash coming from the first sale. The term is also used as a noun: bootstrap is a business with little or no external cash or other support to launch. (Source- Investopedia)
- Bootstrapping is building a company from the ground up with nothing but personal savings.
- Extremely limited resources can inhibit growth, prevent promotion, and even undermine the quality of the bootstrapped product.
- The bootstrap entrepreneur retains total control of the business and makes all of the decisions.
What Are Bootstrapping Methods?
- Owner Financing: The use of personal income and savings.
- Personal Debt: Usually incurring personal credit card debt.
- Sweat Equity: A party’s contribution to the company in the form of effort.
- Operating Costs: Keep costs as low as possible.
- Inventory Minimization: Requires a fast turnaround of inventory.
- Subsidy Finance: Government cash payments or tax reductions.
- Selling: Cash to run the business comes from sales.
One of the most common causes of failure is the habit of quitting when one is overtaken by temporary defeat. ~ Napoleon Hill
Examples of Bootstrap Startup India
- Quack Quack
- Social Pilot
- E&E Solution
- 42Gears Mobility Systems
- Antilog Vacations
Where does the Bootstrap idea come from?
A lot of times they came by accident or they come from their own personal experience to “scratch their own itch” or to solve a problem they personally experienced. They don’t always set out to create multi-million dollar businesses. In fact, many started their businesses as a “side” project that over the years grew into a multimillion-dollar business, but they were not planned that way.
How do bootstrap owners pay the bills when starting?
There are 4 primary ways Bootsrappers continue to pay the bills while building their startups:
- Maintain their full-time job and work on their startup part-time until they can earn enough on the side to comfortably leave their day jobs.
- They do consulting work on the side to bring in cash.
- They have saved enough cash and use their savings to pay their bills.
- They build a business that brings in cash very rapidly.
Story of TechCrunch Bootstrap
Last Known Revenue: Estimated at $6-$8 Million (2010)
Who Are They? TechCrunch is your leading Internet tech media company; you want the latest scoop on startups, they’re “who you’re gonna call.” From its beginnings as one man’s tech blog, TechCrunch has grown to reach an audience of over 12 million unique visitors and 37 million page views per month.
How They’re Doing It:
Two ways – primarily, through online ads; secondarily, through annual conferences. Oh, and now…the $30 million sales to AOL in 2010° (as part of America Online’s expansion into online media companies) doesn’t hurt, either.
Where They Came From:
Once upon a time (along about 2005), Michael Arrington (@arrington) was a Silicon Valley attorney whose interest in new technology and new companies prompted him to start a blog about startup companies and Internet products. At that point, Arrington was “TechCrunch.” He did the lion’s share of blogging himself for its entire first year.
People started talking about TechCrunch. People liked Arrington’s approach. They wanted more of his expertise. Arrington wrote more, people buzzed more, and before he knew it, Arrington’s worldwide audience turned his humble blog into a full-time job.
TechCrunch isn’t just Arrington’s baby anymore, either. Like any precocious kid, it grew fast and smart, and quickly became the place to go for breaking news in Silicon Valley. It covers all the bases from venture funding to acquisitions to “what’s hot on the street” – so well, in fact, that TechCrunch actually helps launch new ventures now.
Startups that want media attention give TechCrunch an exclusive scoop on their breaking story and, in return, they get spotlighted by the #1 source for technology and Internet startup news. Being “first on the block” with information no one else does quite the same way has made TechCrunch the “go-to” source for hot Internet and technology news – which is no doubt why AOL decided that, at a cool $30 million, they’d
be a bargain indeed! (Buy This Book ToRead 75 Bootstrap Stories – Bootstrapped: How 75 Entrepreneurs Successfully Bootstrapped Their Startups and How You Can Too)