How long would it take you to dig a 10-foot hole? You can use whatever tools at your disposal. You can use your hands, a shovel, or heck, if you’ve got a brother or cousin with access to a backhoe, then by all means use it. It would probably take you the better part of a day right? If you have a thermonuclear device, billions of dollars, and a team of government scientists, you could create a 320-foot hole in a matter of minutes like the Sedan Crater in Nevada. If you have access to a major United States waterway, miles of land, and six million years, you can create a mile-deep hole visible from space like the Grand Canyon.
There are clearly a variety of ways you can dig a hole, and just like B2B SaaS, there are different goals to achieve. Is the goal of your company exploratory in nature? Then you’re probably thinking along the lines of the folks who made the Sedan Crater. Is the goal of your company to grow slow and steady eventually turning into a modern marvel? Then you’re probably looking for the tools it takes to make the Grand Canyon.
No one understands the Grand Canyon strategy more than Emeric Ernoult, Founder and CEO of Agorapulse. He is a serial start-up founder who, despite not always having the fanciest tools or abundance of resources, has used grit and determination to chip away at founder success. His knowledge is not one to shy away from, so keep take a listen, and keep reading.
Listen now 🎧
Here we summarize the main takeaways for you to implement or hand off to your team for implementation.
What is bootstrapping?
Bootstrapping originates from the saying of “pulling yourself up by your own bootstraps.” In business it refers to building a company from the ground up without any outside funding or investors.
Why is it important?
Because not all startups are able to obtain investors from the get-go, bootstrapping can be an effective way to get started with little or no capital. Additionally, because of these capital limitations it helps you stay focused, disciplined, and flexible to achieve the kind of success that will eventually attract investors. You’re also in complete control of your company vision. However, bootstrapping is not an easy road to take. It requires a combination of determination, risk tolerance, and competitiveness.
What to do today:
- Follow Emeric Ernoult.
- Schedule a time to meet with your with leadership team to discuss your bootstrapping strategy.
What to do next quarter:
Build your bootstrapping plan.
Bootstrapping a business is a difficult task, but if done right, you can drive significant growth—Emeric, and our ProfitWell crew know this firsthand. Bootstrapping is not for the faint of heart. It takes dedication and perseverance. It’s literally an investment in yourself. But the pay off will be that much sweeter.
Every business is unique, but having a solid strategy will help you stay on track. So, to help you with your own bootstrapping journey, we’ve gathered some tips to keep in mind and help you get started.
- Build your business plan around your budget – This is particularly important for bootstrapped businesses, as your capital is limited. You’ll spend less when you have a plan in place.
- Choose a business model that can generate revenue quickly (e.g., subscriptions) – You’ll want to generate cash inflow as soon as possible to eliminate burning through your reserves.
- Closely monitor your cash and expenses – It’s absolutely critical to know your budget. Learn your burn rate—the rate at which you use your cash over time—so you don’t ever underestimate your spending. And always look to where you can cut costs—this applies to your business as well as your personal finances. Your personal finance decisions will impact your business. Furthermore, be thrifty and spend your money on efficient and functional vs. luxurious and expensive.
- Be prepared to learn – When starting and funding your own business, you’ll need to wear many hats initially. Learn as much as possible about business, marketing, sales, as well as anything to do with your niche, as you’ll need to step in for many task needs. Outsource only when absolutely necessary.
- Make connections – As a bootstrapped business, it’s important to make connections. More often than not, those connections will be valuable for your business in the long run. It can positively impact your business in multiple ways:
- Create awareness for your product or service—share your story
- Find new customers
- Meet and learn from experienced entrepreneurs
- Find affordable resources to help you scale
What to do within the next year:
Starting a business is no small feat. You want to ensure you’ve researched as much as possible around the type of business you’re about to embark on. And as mentioned above, it’s crucial to have a plan in place. Once you’ve developed your business plan or strategy, prepare yourself and put it into action.
Part of the process is assessing and iterating, so don’t get discouraged if things don’t start off perfectly. In fact, part of being a bootstrapped business owner is being flexible. Always assess, learn, and adjust in order to improve.
Who should own this?
Founder/s, CEO, and/or any initial company leadership.
Who's up next week?
Next week, Paddle’s Christian Owens and Harrison Rose tell us about their surprising founding story.
Do us a favor?
Part of the way we measure success is by seeing if our content is shareable. If you got value from this episode and write up, we'd appreciate a share on Twitter or LinkedIn.
This is a ProfitWell Recur production—the first media network dedicated entirely to the SaaS and subscription space.