5 Things to Know About Bootstrapping a Startup

(DGIwire) – Thinking about launching a startup? Before going the venture capital route, it can be worthwhile to assess the advantages of bootstrapping instead. For insights into why bootstrapping is valuable, it can pay to listen to the insights of a veteran businessman such as Marty Schultz. As recently noted in an article on Forbes.com spotlighting him, Schultz is a mentor, speaker, angel fund investor, and award-winning innovator who has grown five companies with a combined valuation of more than $300 million—all with the help of bootstrapping.

“The power of bootstrapping is immense, and is increasingly being recognized by budding entrepreneurs who would once have headed straight to the VC community,” Schultz says. “There are several insights to guide those interested in this smart strategy.” These features include: 

  • Avoid the obvious mistakes.Bootstrapping involves intense amounts of listening to the needs of your potential partners and customers, Forbes.com notes. Marty says it is crucial to remember to ask everyone with whom you come in contact if they would be willing to buy the product or service you are creating. Just as importantly, you need to gain an intimate understanding of the business needs of your potential initial customers. 
  • Establish a business culture that works.From day one, entrepreneurs should surround themselves with people they trust, who have the same motivation they do, Marty explains. An entrepreneur should lead by example, seeking to instill in those they work with the kinds of values they believe will best impact the operation of the company. You need to decide on the type of culture you want in your organization and ensure it is in place from the start. 
  • Get ready to pivot at a moment’s notice.Flexibility is an absolute must for entrepreneurs who are bootstrapping their companies, Marty points out. Business—like life itself—is made up of constant change, whether we like it or not. There are tried-and-true strategies for keeping up with change. One of them is constantly talking with others, including potential customers and other stakeholders, and learning what they are concerned about or fascinated by.
  • Keep your ego out of the equation.It is important to love your new company and the work that must be done to ensure its success, the Forbes.com article says. Conversely, Marty notes, it can be deadly to love yourselfto the extent that it gets in the way of achieving the former goal! It is all too easy to lose sight of the fact that while serving as the head of a new endeavor, you are only as smart as what you have accomplished to date.
  • Set goals and stick to them. The end game should be in your mind right at the start, Marty counsels: Get used to being rejected and learn from it. When you are cold-calling potential stakeholders or engaging in any other activity with a relatively high rate of rejection, set a goal of how many conversations you plan to have each day—and then stick to it.

“As entrepreneurship continues to evolve and identify the ideal strategies for success, bootstrapping is likely to appeal to many with dreams of big business success,” Schultz adds.