New-Age Bootstrapping Is Not A Money Problem, It’s A Product Opportunity
The tendency for entrepreneurs is to build big products. But the problem with big, feature-rich products is that they take substantial time and money.
People talk about this topic frequently, especially in the technology sector. What I’m laying out here, however, is slightly different. I’m discussing how bootstrapping has evolved. How bootstrapping has become more of a product problem and an opportunity. If entrepreneurs can learn to release smaller products early and often, then the conversation about having to raise venture capital early wildly shifts and enables friends and family rounds to be much more impactful — an idea that is beneficial for all parties.
As bandwidth continues to become cheaper and technology more accessible, we’ve seen a huge shift in how technology is being built, deployed and consumed. Even though the technology landscape has changed, entrepreneurs are still very much set in a dated conversation surrounding bootstrapping.
The conversation has been, “When do I raise institutional money, should I raise money, what’s my company worth and how much money am I going to need to build this business?” This style of thinking simply doesn’t complement the newer style of development where you can be fast and nimble without large sums of cash.
The difference between big, feature-rich products and small ones is that the small ones don’t require nearly as much time and capital.
You don’t need oceans of capital to start and build 95 percent of the technology that’s being consumed today. You need a strong product team that understands product focus as well as the importance of moving fast. The boostrapping conversation should be focused around time-to-market and features, not raising money or money in general, especially during the early days. Entrepreneurs must think about releasing early and often and incorporating user feedback — creating a smaller, and more focused feature set that addresses a specific problem.
The beauty of focused products is that they require less time and therefore less money to build. How many huge, feature-rich products fail? About as many as smaller ones. The difference between big, feature-rich products and small ones is that the small ones don’t require nearly as much time and capital, and you can get them to market in a few weeks/months and regularly iterate.
Bootstrapping has become much more of a product opportunity than a capitalization concern. In the world of technology startups, the biggest enemy is time. Time is the ultimate equalizer and the only commodity worth fighting for — you can always make more money.
Top 10 list for getting started:
- Use tools like InVision or Omnigraffle, wireframe your idea so you can have presentation material — just a couple screens, keep it high level.
- Pitch your idea to friends and family and try to raise 200K (use your presentation material again, keep it high level)
- Start strategizing about features to include in your minimal viable product, fight to keep it small — break it down, keep it small
- Using your wireframes, either hire or take them to a development firm that can help round them out.
- Start the design phase; this should not take more than 2–5 weeks to complete.
- Once you have 60 percent of the designs done, start building a clickable prototype (use this to raise more money; your clickable prototype should be built in 4–5 weeks following design phase).
- Spend eight weeks building out the data model based on the clickable prototype.
- By week 12, try to get a small number of people (15–20) to use your software. This is a very early release, expect many bugs — you want to watch people actually use it to see what needs to be changed.
- Incorporate that initial feedback while continuing to build toward your MVP. Do another small release, get more feedback on specifics
- MVP launch (13–16 weeks total) rinse and repeat. (Note: this can be done much faster but on average, this is what we see.)
As more and more people chase the startup dream, bootstrapping has very much taken on a new life. The businesses that will succeed are those that will evolve to live in the cross section between releasing early and often and incorporating user feedback (see Instagram) as opposed to those that chase venture, stay stealthy and try to build big (see Color).