The term, as used in the 19th century, meant “to pull oneself up by one’s bootstraps” and it was often used to describe scaling a fence. (This implied someone was attempting a far-fetched or impossible task).
It is also widely attributed to “The Surprising Adventures of Baron Munchausen” by Rudolph Erich Raspe, where the Baron pulls himself out of a swamp by his hair.
Recently, Alex Konrad of Forbes wrote about how Mailchimp has an estimated valuation of $4.2billion — without a dollar of venture funding, and the consensus was that raising venture capital ≠ success.
Is it possible to build a successful startup on a shoestring budget? Yes, but it depends on what kind it is, and what ‘success’ looks like to you. Some sectors are capital intensive, and it’s unlikely that individuals/FFFs can afford the investments required. But if you’re building, say, an internet startup with a SaaS business model, it’s generally easier to get by without investment — as long as you’re willing to be patient about growth.
Because you can’t launch a startup into a vacuum, you need to figure out where your customers are/where they will come from. So, you either: run ads (expensive) or build your community (longer but cheaper). You have to work as hard as you can to make a dent and get people to notice you. It is also essential to define what success means for your startup and to enjoy what you’re doing.
One thing to keep in mind is you don’t want to have all your money in the bank in the beginning. Sometimes, you can pay for needs as you go. You need to understand how much it will cost you to build, and where it will come from, but you don’t need to have it all at the inception.
A way to save cash is by making small tweaks to your hiring process. For instance, Kendall Ananyi of wifi.com.ng (VP portfolio) said last year that in the early days, they didn’t hire anyone who didn’t already own a laptop.
Being your company’s sole funder can be both a blessing and a curse (and a choice many businesses don’t have). Every founder should be conscious of the point at which they’re no longer capable of going at it alone. Venture Capital is only one tool in your toolkit, and like any other, you ultimately have to decide whether it matches the use case you imagine for it.
Links from the Internets
- Podcast: Shola Akinlade on getting into YC, building Paystack, growth, and the future. [Link]
- Marketing: How trial length affects SaaS conversions. [Link]
- Product: The art and science of Product development. [Link]
- Bill Gates on Paul Allen. [Link]
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