It means a near death experience, my friend.
But if I had a chance to do it all over again, I would.
- You have no outside funding like venture capital.
This is far and away the most important part of bootstrapping a business.
And then the question is how you should do it.
Whilst this shares what I personally went through in bootstrapping my own business, I also know that the stories might not necessarily apply to yours.
As a brief history, I incorporated a business in June 2020. Its initial business model was
- Providing corporate training, and being paid for that training
But you’ve seen that since then, it’s evolved into what is today a content agency, where we are getting paid for
- Providing training
- Sales of books we write
- Creating websites for organisations
- Designing the long form reports of organisations (annual reports etc.)
Therefore, it makes more sense for you to take the principles, rather than just the how-tos from this article.
Let’s start with what you shouldn’t do
That evening, as I sat with my friend, who had built multiple multi-million businesses, griping about how hard it was to launch the product and get sales, he asked me,
Do you want to make money or not?
I got what he was trying to say.
With the products that I was debuting, it seemed like I was fishing in a market that wasn’t keen to pay money.
For a long time, I thought that I could do good, and earn money. But slowly, I realised that by trying to do the two, I was increasing the chance whereby I would fail.
Don’t try to do too many things at once
When you start becoming a business owner, you slowly realise that you have more ideas than time to execute them.
You thus have to find some way whereby you learn to focus on what you have to focus on, and slowly drop the rest. This isn’t the easiest thing, but it’s something you have to learn to do in order to be successful.
We aren’t just thinking about success in terms of millions of dollars. But just making the small thousands of dollars that allow you to survive.
I would thus say that in your early years of business, it matters that you build up a business that allows you to survive first.
Build for problem-product fit
That’s where people say you should often solve for ‘product market fit’.
But I think the better thing to solve for is product-money fit.
Figure out where people will and can pay you money for.
In our first iteration of our product, whilst the product looked fancy, no one was paying money for it because it didn’t solve a problem they were used to paying for.
For example, we initially hypothesised that parents would pay for something that allowed their children to speak more easily about their emotions. But we soon found out that this wasn’t something they thought was a problem.
The product became a nice to have, rather than a need to have.
Sell water, not the water bottle
It’s what I also call the water vs water bottle problem.
When I started a business, I thought that I had to come up with great ideas that no one thought of before.
Soon I realised that making a market-leading product that no one had tried before, wasn’t that easy to sell.
Of course, if you have venture capital to burn, that works.
But if you’re a small, bootstrapped business, you might be better off selling something people really need to solve a painpoint.
Balance the pivot and the push
When should you pivot away from the business you’re running, and when should you push more deeply into what you’re doing?
No straightforward answers here.
But what I’ve noticed for the multiple businesses that I’ve started (of which some failed), is that you ultimately need to first know what problem you’re solving.
It’s only after that you know whether to push or pull away from the business you’re running.
For example, when I first started freelancing as a content writer, the basic business model was:
- Businesses need someone to write good and engaging content
- I provided that more cheaply and reliably than most others
Even though this model was earning me enough money, I was not content.
Know what’s a new product pivot
All of a sudden, in July 2022, I tried a new product. All of a sudden, I teamed up with a friend to debut a fitness course.
I didn’t have a six-pack. All I knew was that earning money through content writing was slow.
And I wanted more money.
Debuting a new product might work, but only if you’re not trying to run your old product at the same time.
Understand when you’re pushing deeper, and better
What I think works better is if you’re clear about what your immediate priorities are.
Over the past 2 years, it’s been useful to review what my top priority is every quarter.
This has helped me to concentrate on what I need to get to the priority I’ve set.
For example, in December 2022, I realised that content writing on its own was not going to generate enough revenues for us in the longer term.
We thus started chasing bigger projects that would involve expertise across digital marketing, web development, content writing, and graphic design, so that our per sale value could increase, giving us greater visibility into the short to medium term future.
Whilst it has been a painful transition, especially when we didn’t start out having these capabilities, it has become a meaningful change. It has allowed our business to become a lot more resilient.
To know that you’re making meaningful change, you thus need to
- Set your direction
- Set the milestones that signal that you’re heading in the right direction
Keep more money than you need
I stared at my bank account, feeling my heart start racing. I didn’t know what I was supposed to do with this amount of cash, and with this number of staff I had to pay.
As you scale your work, you will slowly realise that you might burn cash faster than you make it.
That’s why the reserves on hand is so important for you to be able to sustain your work.
Calculate your spend over the last 6 months and then average it out.
Keep at least 6 months of business expenses in the bank.
Moving from the team of 1 to a team of more
This might be by far one of the biggest, and hardest transitions.
But it’s an important one to make, especially if you want to scale a business.
A business is essentially an entity that amplifies the impact of a single person.
As you begin to work, you will realise that you’ve now found yourself being taken more seriously. From someone who no one would reply over text, you now have people who are replying you, because you have a company registration number and a ‘Pte Ltd’ that looks more legit than just [email protected].
But moving from that point is hard. It involves you first hiring – partnering a business partner who can do something you can’t; or hiring someone to share the workload.
For example, in my content agency business, I’ve realised that one important piece is hiring a sales manager who can make more sales, so that we can get more deals in the pipeline.
This is what we are doing to our product
Build, measure, learn.
It’s what Eric Ries has recommended through his whole Lean Startup methodology. And whilst it doesn’t always work, it still provides a useful frame.
Know what you’re testing.
See the results.
The beauty of smallness
Over the last 3.5 years in business, you come to see the beauty in being small and independent.
It’s not about criticising venture capital. But it’s about saying,
Hey, there’s a beauty in being independent and nimble.
I will bring you back to the time this was made real to me.
When I had the flexibility to attend a youth exchange in Japan, without asking anyone for permission.
Sitting on the plane for the first time in 4 years since COVID-19 kicked off in December 2019, I finally saw the price of independence.
4 years ago, I had come back to Singapore thinking that a job would land me the best life.
But 4 years on, I now knew better.
It wasn’t a job that landed you a nice life.
It was the independence to create your own work that did.
That’s why you bootstrap.