Are would-be entrepreneurs letting the funding-equals-success myth stand between them and true success?
Too many startup founders crave the validation of big-name investors and end up buying into the idea that getting venture capital somehow means their business has a better shot.
I became an entrepreneur to own my business and operate it in a way that puts my customers first — not the board. Bootstrapping isn’t for everyone or every business, but the tips below might just help you go the distance.
1. Make the commitment
Bootstrapping your business requires that you’re prepared to forgo outside capital, no matter what. Necessity being the mother of all invention, you’ll be much more determined to generate revenue if there’s no safety net of investor money available.
No investors would have been excited about my co-founder and I changing direction five times. Since we answered to no one, we could make many adjustments that eventually led to success.
2. Protect your time and attention
Ideas have power. Often, your great idea will inspire others to waste your time. Everyone and their cousin will want to “set up a meeting” and “explore some new opportunities.” Fiercely defend your time from people who use words like “collaborate” and “white-label.”
You’re not likely to develop a true shared vision by smashing together your ideas with someone else’s. Instead, meet with people who inspire you and meet with people who have large audiences (customers, traffic, fans, and followers) where potential overlap exists.
Not only will you learn a lot, but those relationships will create marketing channels to reach your future users and customers.
3. Make your first dollar ASAP
The information you’ll learn from your first customer is priceless. Knowing their likes, dislikes, and frustrations lets you create a vastly improved experience for your second customer. Never stop measuring and improving your offering.
If you can make $1, repeat the process and make $2. Don’t stop.
Remember: If you build it, they won’t come. You need a population of potential consumers to experiment against. If you don’t get foot traffic with a storefront, begin attracting your potential customers before you open shop. Do this via SEO or social media, and then capture email addresses, fans, and followers.
4. Fail fast, calibrate quickly
Your initial idea can evolve into a different opportunity. Be objective in assessing your business’s viability, and let the data do the talking. Turn the part of your business that works into your core offering.
Our first product concept was CoinPiggy, an online banking app that let friends make deposits toward a predetermined savings goal. Making deposits to your own account didn’t make much sense given the processing fees involved.
However, we liked how friends and family could contribute towards a user’s savings goal. That one feature helped spark what would become crowdfunding, and it resulted in GoFundMe.com.
5. Find your A team
Resist the urge to bring on interns and entry-level employees; they’re not nearly as committed to your company as you are. The oversight and hand-holding will crush your productivity.
Since you are your company’s biggest asset, you need to remain free from distractions that don’t add to the bottom line. Focus on generating enough revenue to bring on true A players.
I purposely handled all customer support for GoFundMe well into 2012. We used the revenue to hire the most talented developer available, and the impact was immediate.
When it came time to hire our first customer support agent, we didn’t. Instead, we hired the best VP of Operations we could find. Six months later, that same VP manages five customer happiness agents and achieves five-minute email response times. Our customer happiness team should double in size by the end of the year, and boy, are we glad all the management, systems, and training materials are already in place.
[Editor’s Note: This is a guest post by Brad Damphousse, co-founder of GoFundMe, a crowdfunding website for personal causes and life events.]