Put a genius on Mars with one goal: survive. Do you think she’ll be able to bootstrap her way to life?
The truth is, sometimes no matter how hard we work, some things cannot be done without a toolbox.
When I was half way through my bachelors, I didn’t have that toolbox. And hustling was definitely not enough.
Here’s the story and how you can be prepared yourself.
Lacking key bootstrapping ingredients
As a junior business student and athlete in college, my toolbox was barely starting to fill. I was (still am) passionate for the environment and wanted to make a difference in this space so I broadly hypothesized that if I found a way to reward people for their eco-friendly actions, I’ll be able to boost recycling, reusing and reducing rates.
I had already realized the beauty of technology startups: how a few lines of code can make such a big difference in people’s lives. I had also learned how much progress can be made before even writing a single line of code. So, I focused on that.
Through public transportation, friends’ help, saving $100-$200 from my scholarship, I was able to meet every recycling facility, environmental club and over one hundred potential users, in the region.
I had learned all I needed to learn from every stakeholder in the business and as much as I tried to continue getting my hands dirty, it was time to build the product.
No funds, no co-founder and no technical background.
Long story short, I realized that I needed at least one of those three to move to the next step.
First and foremost, learning to code.
It didn’t take long to understand how important it is for startup founders with any background to learn programming. The reality is that regardless of how abundant programming lessons are on the web, you can’t just read a book or two, take a few classes, do a couple of exercises and you’re good to build all the features in the world.
I soon learned that learning to code was a long-term investment and I couldn’t rely on this path to build the first version of my idea back then.
Second, collaborating with a co-founder.
Someone tells you he’s all in. He shows you all the signs anyone looking for a co-founder would want to see like volunteering to help or calling you in the middle of the night with ideas. And you’re like, this guy is the real deal so you go for it and you both get to work.
A month later he starts slacking off. 2 months later he asks you to buy him out!
Before we get to the lessons learned part of looking for a co-founder, here’s what happened two months after I terminated the co-founding relationship with the first guy.
This other guy comes up to me, he said something along the lines of, I’ve heard a lot about what you’ve been doing so far and I’m really interested in being part of your startup.
The only issue I found in us working together was that he already had so much on his table: married, two kids, a full-time job and was going to school full-time. When I saw how passionate he was, I said to myself, I am as busy as he is and I always make time for this startup so if he wants it as bad as he seems, we should be fine.
We did some tangible progress together until he just couldn’t handle cutting that many hours from his family time so he let go of the startup.
Two very important lessons learned here:
1- Co-founders cannot be recruited. You may have heard many people use the analogy of marriage when they talk about the best co-founding relationships and it’s 100% true. Just like you can’t recruit a husband or a wife, you can’t do it with co-founders.
If you never had any previous contact or relationship with someone who seems to be like a good potential co-founder, build that relationship first starting with as little as a meeting over coffee, working on a project together, supporting each other (I’ll help you with X, help me with Y) and before you know it, the time to pop the co-founder question will present itself.
2- Co-founders’ interests must be aligned. You’d be surprised how many people would be interested to join your startup just so they can say that they’re part of one. You’d also be surprised how many people would want to join you just so they can learn the process before building theirs. Notice here how this misalignment of interest is dependent on the first point, that is, if you recruit a co-founder, most likely you won’t know what they’re into it for.
Most people know what they want to do over the 2, 3 or 5 next years. And I’m not talking specifics. Things as simple as, I will be looking for a job, I will be starting a business, I will be doing my masters. The red flag is when their plan is completely different from yours and that’s why hanging out at the right place is key. Meetups, conferences, social events, Slack groups are many channels that include people with similar interests. It’s then for you to know if what they want to do over the next 5 years is build a successful startup venture.
Third, seeking funds.
First things first, it made so much sense to start with university alumni and more specifically those who have been part of the tennis team. I was a college athlete by the way.
I met with over 20 potential investors and out all of the things I said and showed, the word startup didn’t work with them. For most, investing in a startup meant throwing money down the drain with a very tiny chance that it may come back 20 times bigger. And that’s true but none was prepared to take that kind of risk even for as little as $20,000 in angel funding which is frankly nothing for people with a net worth of $5+ million if this $20K has the potential to come back 10-20X bigger.
The challenge was even bigger. All of the people I met knew nothing about startups. It took me and them a lot of time to get up to speed and about investing in technology startups. Many of course lost interest quickly and the few that were left decided to pass.
This brings us to one important lesson learned: investors are like co-founders. You’d rather not have one than getting funded by people who will distract you more than help you. Getting funded by people who have no interest in getting involved can work if they are part of a group of investors from which 1 or 2 understand what you’re doing and can help you accomplish your goals. These 1 or 2 knowledgeable startup investors must be willing to manage the outsiders.
In short, find the right investors by hanging out in places you can find them: meetups, conferences, social events, Slack groups, approach directly, etc. Cold calling people from the community even if you have a connection with them can get you funded but most of the time, you should be prepared for an extra layer of burden.
Funny thing. At least I thought it was funny back then when it turned out to be the way it always works. 4 of the people I spoke with called me about a year later asking for my progress and expressing their interest to invest.
What this means is that had I started building relationships with those people the day I started pursuing my venture, I could have been funded at the right time.
Lesson learned number 2: always be building relationships no matter how early you are in the process. Even if you don’t have an idea yet.
So, no investors, no co-founder(s) and still not well equipped to code the first version.
What came next was a lot of thinking.
Ever had that feeling when you want to do so much but you can’t do anything?
Many sleepless nights later, I decided to head over to those recycling firms I spoke with earlier and pre-sell them on some ads in the website. And it worked.
I told them that if they advertised with me today, not only will I be promoting their company at school but also I will personally go from business to business and make sure they send you their recyclables.
I did that and as a result made a little over $2,000. It was only then when I felt like a real entrepreneur. And it felt great.
Looking back, I am now realizing that I unintentionally did many “right” things all because I didn’t have the funds to build the product. Frankly speaking, had I had the $20,000 in angel funding I needed, I would have put most of it in building the product way early in the process and that could have caused a bigger disaster.
With the money I made pre-selling ads, I hired a team of freelancers. It wasn’t enough but at least I built some leverage to negotiate with the development team to pay over 8 months. I still needed to use a big chunk of my scholarship money.
While this was happening, I took some time to meet other entrepreneurs in the region at school and during events organized by business organizations. I spoke about my experience and lessons learned and got to help a few aspiring entrepreneurs get started.
Then something good happened.
Most of those founders were having the same problems and needed a lot of help. Every now and then I would get emails seeking my involvement as a consultant and guide. To me being a consultant meant years of experience and I certainly did not have that. For many entrepreneurs, what I did, how I failed and still managed to make progress with my venture was an experience worth learning from.
So, out of the blue, I was getting paid to help entrepreneurs execute on their ideas from hypotheses definition to testing, validation, team building, pre-selling, fundraising, etc.
A few projects later, I decided to start AspireIT where I partnered with talents that complement my skills and together help entrepreneurs turn their ideas into startup products worth using and paying for.
For a couple of years, AspireIT was and still is the cash cow.
Funny thing, once again, a year or two later, I realized that many multi-million dollar companies had their own AspireIT before building the next big thing. Mailchimp, Basecamp, Intercom, Kissmetrics and many more companies fueled their startup ventures through consulting.
By the time the web app was completed, I launched and guess what? out of the 300+ people that joined the wait list, only 5% converted. When I went back and asked, I kid you not, some people asked me who I was!
Almost 10 months later is a very long period and it turned out that almost all the work I put at the beginning was flushed down the toilet. If you don’t move fast, people change priorities and that’s exactly what happened in my case especially that the problem I was solving was more charitable than it was in addressing stakeholders’ business and individual needs.
I went back, iterated and built again. But this time, I had some funds to reinvest and product development went faster.
A year later, I hit breakeven and few months after that, I decided to move on to another project.
Long story short,
Find the bootstrapping foundation checklist in the pdf file above plus how I quickly scaled AspireIT beyond the local market.
Starting from zero, one of the following three conditions must exist in order to bootstrap:
Having a stream of income. Whether it’s a full/part-time job, freelancing or savings from work you’ve done in the past.
Skills to create the product. In the case of a technology startup, knowing how to program the initial versions of the application will take you a long way.
Co-founder(s) with complementary skills. More specifically, in the case of a technology startup, it’s programming skills that you need and thus if your background is in business or marketing, a technical co-founder will be of great value.
Another fourth important condition is,
The business is self-sustainable. What this means is that your product will generate revenue since day one such as Square which gets a transaction fee every time you use their processor. Unlike Facebook or Quora that need a strong user base before generating advertising revenue.
What does all of this mean?
- There’s so much you can do regardless of how limited resources can be. Namely,
- Meeting with potential users.
- Building traction pre-launch.
- Pre-selling your product and serving users manually.
- Today, you can also create the initial version of your application using drag and drop app development platforms.
- The moment you embark on the entrepreneurial journey is the moment you should be connecting and building relationships with potential co-founders and investors. It takes time to find the right fit in and only with networking and relationship building that you can make the process go faster.
- Creating or maintaining a stream of income is necessary. By creating, you have two main options:
- Instead of focusing on the product (app) to serve user needs, start by selling a non-scalable version of your upcoming solution. For instance, if you’re building a marketing tool that will enable small businesses to manage their social media, start by selling social media management services.
- Whatever you do best, do it for others by freelancing. If you write good content, design good banners, take good pictures, or have a background in bookkeeping, then sell your services and reinvest the gains into your startup.
- If you’re not a programmer, you don’t necessarily need to learn code. But you definitely need a technical foundation for hiring, evaluating and managing.
This story was part of the journey that documents the ups and downs of a bootstrapped founder. Join us below, email me back and let’s do it together. And if you haven’t downloaded the bootstrapping foundation checklist, click here. When you download it, you’ll also automatically join the community.
As I mentioned earlier, in the checklist and summary, you’ll also find how I quickly scaled AspireIT beyond the local market.
In the comments below, tell us the biggest challenge that you have or are currently facing in terms of funding the initial stages of your startup.