Sivakumar is an Entrepreneur who has worked on various innovative software products and solutions across the globe. Being a natural problem solver, he engineers solutions for various clients and leads the execution of software development. He also ensures to blend innovation and quality while architecting software solutions. Sivakumar has 15+ years of experience in designing and developing solutions using various technologies for his clients from technology and start-up sector.
Bootstrapping your Startup should be your first choice when you want to start your entrepreneurship journey as it gives you the freedom to explore many opportunities and be the King. The risk is big but the freedom you get to, and the learning keeps you laying a strong foundation for a long-term benefit.
What is Bootstrapping
Bootstrapping is the process of starting your business with your fund. Early-Stage Start-ups especially tech startups rely on founders’ money, be it his/her overdraft, credit card, or some personal loans.
The team should Work- Hard
You need to work hard in a bootstrapped startup. Your team will get low pay in the early days, and they prove themselves to get into the next level and grow along with the company. In a funded startup you can hire someone for money but there is a chance of jumping to another job as they work with you for money. But when your team works with you for a Vision even one loyal believer in your vision is enough to succeed.
Strong Foundation and Steady Growth
Your Balance sheet every year should show your growth be it 10% or 100%. In a bootstrapped startup, this gives the happiness, and you are creating a revenue model with Y-O-Y growth and good ROI. Say you can see how much capital you added and the yearly returns from your share
Be a King with the right focus
If freedom is your choice of being an entrepreneur, then bootstrapping should be your first choice. Your financial creativity will be more when you are using your funds, you know how to manage your funds more effectively and efficiently. One of the qualities you should have is to be patient. Success in bootstrapping is going to take longer than anyone can predict mostly, and one needs to be much more patient else you will lose focus. Being a King with the right focus is important.
Customers will be Priority
You work for a client, and they pay you for the service or product you provide. They believe in you without knowing you. You build trust with them, and they become your top priority. Word of mouth than marketing is the key for your growth, and you target that. Your team knows the priority in handling clients and the importance of the same. Later this becomes your company culture, and these first-level employees are the leaders who ensure the same culture is followed down the process for the next few years. Your survival depends on the success of your customers and all this leads to a strong efficient customer-focused company.
Family and Mental health
It’s not an easy task to bootstrap your startup. You may get into a lot of relationship issues and undergo tremendous pressure. Staying on top of all this and ensuring your mental health is good is most important for your success. Your success should be defined by your parameter which can provide you with good mental health to undergo the startup journey that too with self-funding
At what stage you should look for funding
Scaling requires funding. After proving oneself and getting into a Scaling stage, Funding should be the goal for growth and when some investors align with your vision, it’s good to get funding, so that when you grow many other grows. At last, any business model should be more profitable than burning the money at a very high rate. In the early days, a bootstrapped startup founder knows the value of money. Founder knows how 10 rupees from 100 people can turn into 1000 in 2 to 3 hours of effort in a very small business and each business will have such unit economies.
Pros of Bootstrapping
The founder holds complete responsibility, over a period, you will be able to handle immense pressure and also learn more about each and everything of your start-up
Personally, Out of the Box thinking will be more, as the challenges you face day-to-day will be different
You will be an employee in a funded company. Your role might be big but your control over some of the decision-making might not be fruitful as much as self-funded.
Cons of Bootstrapping
You will majorly miss networking. One important add-on for a funded start-up is a lot of helping hands along with funds.
If your vision is to go public, at some point you need to slowly decide and get investors on board.
A lot of decision-making is required in your journey as an entrepreneur and there needs to be a big management team hen scaling business which is only possible with funding.
Due to lack of funds, a bootstrapped company may miss Growth Opportunity
Tips on Decision making for investment
We have been tracking a lot of companies and noticed some of the start-ups – almost acquired by other big companies soon after funding so that the companies get a strong technical team for their core business. So, bootstrapping can get you more time to stay in the game than a funded company sometimes.
Egos between founder and investor can lead to ruin your career and vision. We have seen over the years, some enthusiastic start-ups failing due to this. Many know one famous example as such is housing.com
Be Smart with investors. If your gut feeling has any doubt don’t proceed with investment just for money.
Investors should be a part of your journey and should only be helping hands where both of you get benefits from the deal