There are a number of ways to get funding to start a business. For #DenStartUpWeek, the focus was on Bootstrapped StartUps. With limited cash, resources, time, and energy, start ups must be resourceful with regard to pretty much everything. This is what I call the “Bootstrap Diet.” Last week, local entrepreneurs came together at the Turing School of Software and Design to give Bootstrap Diet tips to entrepreneurs, small businesses, and anyone looking at alternative business funding. Here are some key takeaways from the talk:
1. Stay focused on the customer. On the Bootstrap Diet, you constantly have to make trade offs. The customer shouldn’t be one of them. CTO and Founder of BlogMutt, Wade Green said the best decision his business ever made was to focus on the customer, even during tough financial times. Why is that? “When you take on VC funding, you take on another business partner,” Green said. Staying focused on the customer allows the business to stay lean without having to meet the sometimes strenuous demands of VCs.
2. Employ Strategic Marketing. Marketing budgets are stark on the Bootstrap Diet, if there are any marketing teams at all. Pontrelli of Inversoft recommends to go find people directly. Your competitors might have enormous budgets and you might find yourself lulled into their shotgun marketing approach, but take it as an opportunity to be strategic. Green, of BlogMutt, said he recalls feeling overwhelmed by the marketing efforts of one of his fiercest competitors in the early days, not to mention the $18 million in funding they’d received. “I thought, ‘they’re everywhere,’ how are we going to compete?’” Later, Green said, he learned that same competitor was less profitable than BlogMutt at the time, and today has fewer employees and customers. Making tough and lean decisions forces you to focus on the profitability of the business, Wade said, which benefitted BlogMutt in the long run. The entrepreneurs on the panel recommended early marketing efforts around sending direct emails, meeting people in person, and leveraging your existing networks. You don’t need to spend millions of marketing dollars to get your name out there.
3. Fake it ‘til you make it. Let’s face it—sometimes electing not to use VC funding makes it difficult to gain business credibility. The Bootstrap Diet means that you have to rely on yourself and the few resources that you have in order to make it. Sometimes that requires you to talk your business up. Brock Berry, CEO of AdCellerant, said that the biggest challenge a start up faces is sounding legitimate. If you can’t promote your own product or service and sell it like your life depended on it, why would anyone want to buy it? “It really started with that first customer,” Berry said. “Once we found success with our first customer, we quickly added 10 more and built more credibility in the process.” Bootstrapped entrepreneurs are really responsible building the car as you drive it.
4. KEEP GOING. Nicole Craine, COO of SurveyGizmo, said her biggest piece of advice to entrepreneurs is to have grit and tenacity. She advocated for being flexible and also said to not be afraid to ask for help. Being an entrepreneur can be overwhelming and you will wear many hats. Seek out help when needed and no matter what, keep going.
From getting an idea off the ground to implementing and sustaining growth, an entrepreneur faces tough challenges when trying to start a business. Other startups should look to The BootStrap Diet and to the panelists as an example for guidance and inspiration as they begin to grow and scale their own operations. Sometimes a limited budget, while constraining and daunting, can be a huge advantage because it forces you to be creative and innovative. Let a limited budget be a driver to success and not a death sentence to the business.
~Caitlin Logue, Marketing and Account Coordinator