The art of bootstrapping is more than a financial strategy for startups, it’s a founder mindset that puts resourcefulness, creativity, and resilience alongside a shoestring budget, testing the ability to build and grow. By embracing lean practices, prioritising revenue generation, and navigating financial challenges, entrepreneurs can build sustainable businesses that stand the test of time, you don’t always need other people’s money. As you embark on your bootstrapping journey remember that limited resources can spark creativity and lay the foundation for a robust and successful enterprise.
Bootstrappers take an idea without the backing of anyone else but themselves, and having little or no starting capital, do it for themselves. It takes great dedication, work ethic, and single-mindedness to achieve success this way, but many of the successful companies we see today had humble beginnings as bootstrapped enterprises – Dell. Apple, HP, eBay.
A great example of a bootstrapped company is GoPro, which develops, manufactures, and markets small, high-definition body-worn personal cameras that records user’s experiences. The cameras became popular among sports enthusiasts because of their ability to record hands-free, high-definition footage. Founder Nick Woodman conceived the idea of a wrist strap that could tether to existing cameras for surfers. He was hoping to capture quality action photos, but he found he was unsuccessful as an amateur photographer because he could not obtain quality equipment at affordable prices.
He tested his first makeshift models but realised that these were not good enough, concluding he would have to manufacture the camera, its housing, and the strap himself. In 2002, Woodman raised $10k in bootstrapped cash to fund his idea from selling bead and shell belts out of his VW van. He moved back in with his parents and spent long hours developing his product. He scraped by doing many different types of work so that he could design his product, which he did by hand because he didn’t have enough computer design experience to do so digitally.
In 2004, the company sold its first camera system, a 35mm analogue device. As new adopters discovered the product, the cameras branched out from surfers to skiers, cyclists, snowboarders, skydivers, base jumpers, white-water rafters, and skateboarders. The company consistently grew revenue and in 2014 went public with an IPO valued at $3bn.
Although it took ten years for GoPro to reach its zenith, there had been a great deal of marketing, social media strategy, as well as constant consumer technology advancements going on throughout this time. And, of course, the company benefitted from being in the right place at the right time by taking advantage of a situation when smartphones were making traditional digital cameras and camcorders obsolete.
Woodman was not a success the first time around. He previously built two companies. The first was a website which sold electronic products. The second was a gaming and marketing platform. Both failed. Determined to succeed, Woodman came back a third time to pursue his dreams with GoPro. So, it can be done from a bootstrapping start by buckets of tenacity, resilience and timing,
I’m currently working with Dylan and Rhiannon, husband and wife business partners on a bootstrapping project. They sold their B&B post Covid. They were in the ‘messy middle’ – couldn’t compete with the larger venues offering a ‘bundled offering’ and Air B’B low-cost service. They followed their passion: Our aim is to showcase and celebrate the best artisan Welsh cheeses. I’m helping them develop and grow their commercial and financial model, whilst also imposing myself as chief taster in new product development. Oh, and they pay my modest fees in cheese – the barter economy is alive and well and should be leveraged as a bootstrapping strategy.
Why cheese? Dylan explained: I loved cheese as a kid! As I grew up my tastes broadened, and I loved finding new and unusual cheeses from delis and farmers’ markets. Fast forward 35 years, and it was time to turn my passion into a business. After months of researching (read: eating cheese) and talking to (read: eating cheese with) Wales’ best artisan cheesemakers, we launched our omnichannel Cheese business in early 2022.
From my own experience, Welsh cheese is top notch. From coastal farmsteads to small dairies in the foothills of Eryri, the beautiful rural landscapes make prime cheesemaking locations. Welsh cheese is underrated. Welsh cheesemakers are pushing boundaries with their innovative recipes and flavours while preserving traditional techniques.
The business operates from a shop, selling individual truckles and wedges attracting a loyal, local consumer base, and has also enjoyed success from the tourist economy. From both b2c audiences, they developed a monthly membership model offering hand-picked selections of cheese, a gift service of hampers and cheese boards, and this year launched a b2b model to hotels, delis, farm shops and cafes in the region.
In Spring, they will launch a monthly cheese and wine club, partnering with other local produce growers offering wine, speciality breads and cracker, organic fruits, and chutneys. These events are designed used to develop the brand, build partnerships and cross-selling opportunities, share ideas, test new products, and also attract potential new customers.
My three favourites from Dylan’s and Rhiannon’s cheese emporium are:
- Perl Las, meaning Blue Pearl in Welsh, is an organic blue cheese made by Caws Cenarth. This delicious, veiny cheese is delicately salty and creamy with a lingering blue aftertaste.
- Perl Wen is Perl Las’ cousin, White Pearl, a soft centre with citrus flavour with a hint of sea salt. Hungry? Keep things simple with crackers or bake the whole wheel in for a glorious fondue.
- Teifi Seaweed is based on a Gouda like Teifi Natural, with locally harvested seaweed adding a distinctive saltiness flavour and aroma. Irresistibly moreish.
Before I get all zen like over cheese, what lessons can we take for the art of bootstrapping from Dylan and Rhiannon?
1. The bootstrapping mentality. This is key. Set an emphasis on lean operations, keep all aspects of your business simple and focused, allocating resources only to essential activities that directly contribute to business growth.
The couple ploughed all the proceeds from the sale of their B&B into the new property and its refurbishment. They set aside twelve months of savings as an emergency-fund. They stick to the essentials and spend any free time they have doing things that are free – coastal and hill walks being a favourite.
2. Embrace DIY. Hand on, hands in from day one, just make sure everything is fit for purpose, from your marketing materials to basic website design, embrace the do-it-yourself ethos.
Don’t be afraid to do the dirty work. Everyone starts out building a company pretty much the same way – brimming with pride about their new idea, but needs a little luck, but more than anything it takes hard work, determination, and time. To bootstrap successfully, you’ll need to drop any notions about low-level or high-level tasks, everything is important and it’s all on you.
3. Frugality, financial discipline & monitoring. Be frugal in both personal and business spending. Maintaining strict financial discipline is crucial when resources are limited. Regularly monitor your financial metrics. Stay on top of cash flow, track expenses meticulously, and adjust your strategies based on real-time financial insights.
Be cautious about accumulating unnecessary debt. While some debt may be inevitable, strive to keep it to a minimum and explore alternative funding options before resorting to loans. Be smart with your money, spend it on things that will generate revenue. It helps develop scrappy instincts and focus on making money, rather than spending it.
4. Build a solid foundation. Invest time in building a strong foundation for your venture. Establish a clear value proposition, understand your target market, and refine your business model for survival and sustainability as the first goal.
Bootstrapping doesn’t afford you the luxury to pay top dollar for experts, so your own research and learning about marketing, technology, finance, business development, and customer service is essential. It will push your growth cycle out but will save you cash and build your own skill base.
5. Use free/low-cost tech tools. Take advantage of user-friendly cost-effective tools and platform that cater to bootstrapped businesses. From basic CRM, project management to marketing automation, there are numerous affordable options available. They used an aging iPad with no memory.
For Dylan and Rhiannon, the software used to fulfil orders is easy to use, makes their job as a business owner easier and less stressful, and delivers a good customer experience. You don’t want your spare bedroom to look like a fulfilment warehouse!
6. Prioritise revenue generation. Focus on activities that directly generate revenue. This might involve offering an MVP or service to start attracting paying customers. Don’t be apologetic, simply be upfront that you’re bootstrapping. Recognise this is an embryonic process of trial and error. Your venture is all about learning and testing, figuring out which product or service resonates in your chosen market. The aim is to get your customers fund your growth.
7. Implement customer feedback and Iteration. Use customer feedback to guide product and service improvement. Iteration allows you to refine your offerings based on real-world insights, increasing the likelihood of success. Focus on providing exceptional products or services that generate word-of-mouth referrals and repeat business, creating a sustainable revenue stream.
8. Strategic networking. Leverage networking opportunities to build relationships with fellow entrepreneurs, mentors, and potential collaborators. These connections can offer valuable advice, resources, and collaborative opportunities.
Finding a balance between realising your grand vision and making ends meet can make or break a bootstrapping venture. With minimal cash in the bank, bootstrapping offers a markedly shorter window of finding a product market fit. Most bootstrapped startups lack an abundance of cash, so they are forced to confront the question of how to monetize early on. Networking connections are a fast forward route to building your market knowledge and reach.
9. Bartering. Explore opportunities for bartering products/services with other businesses. Trading skills or services can be a cost-effective way to acquire what you need without spending cash. Dylan and Rhiannon have a number of reciprocal sales channel relationships and joint-marketing initiatives where the investment is time, creativity, and effort, not cash, to open new routes to market.
Partnering up with other entrepreneur can be an accelerator, but don’t just jump into a partnership because the collaboration and fit looks obvious, unpack the synergies. Treat it like you would a marriage and work out the compatibility, and the ‘win-win’.
10. When you’ve earned your first pay cheque, take It. Dylan and Rhiannon paid their first two employees for eighteen months before paying themselves. They put everything they could back into the business. When it turned a profit, and their savings ran out it was time to start paying themselves.
Twenty months in (note they’d budgeted for twelve), the business could finally afford it. Pouring everything you have into something with no return is not financially or emotionally sustainable, so when the time is right for you, take the pay. You’ve earned it. Literally.
Everyone’s entrepreneurial journey is unique, but the art of bootstrapping is all about Survive until you thrive through a combination of common sense, determination, and ingenuity. Build your Minimum Viable Startup.
There are significant benefits from taking the hard path. No equity is given to outside investors, and you have full say in the direction of your company. You get to flex your creativity muscle due to a lack of money, and you learn to prioritise your tasks and then execute them – developing strong budgeting habits that benefit you for the life of the business.
As Rhiannon said: You learn, learn, and learn some more. There are a lot of lessons to be learned when you go about it the ‘hard’ way of bootstrapping. Everything always takes longer than expected to. There are days you never think it’s going to happen, but you push through.