Bootstrapping or "How to be a cheap b@st@rd"
“I’m the cheapest bastard alive. I won’t buy you coffee.” So warns Carl Mercier, founder of Defensio and an all-around serial technology entrepreneur. “Frugality rules! I rented our first office space for $270/month – it smelled, but they got the job done.”
It’s the law of bootstrapping, he says. Well, one among ten other gems he dropped for those of us at his meshU session yesterday.
Tired of pandering to the empty-pocketed, demanding VC community? Looks like you’re going to have hoe the hard row that Mercier’s taken. So you might want to read his laws.
Advantages to Bootstrapping
- Call your own shots
- Exit when you want, at the price you want (apparently, you don’t need that many millions to be happy $1-10M might be enough for you, but not for a VC.)
And what do you need to do to make this utopian world yours? Here’s my Mercier Top Ten :
- More than just hackers. Hackers don’t make good businesses.
- Treat your start up like running a marathon (don’t worry, you can fix things later) AND a sprint (speed is the start-up’s ally)… at the same time.
- Get a business model that works (ie: not ad-driven)
- Never give up… although you might need to switch gears
- Working alone sucks and great strategies come from bouncing ideas around; find smart people. Warning: finding co-founders is hard. Check out your local barcamps, democamps and other local events related to your product. Get to know the community and you’ll find the right person.
- Always focus on the end goal – forget about the “cool” stuff that will improve your code by three per cent because you don’t have money or resources to waste. Unless you like eating peanut butter sandwiches forever.
- Never neglect the business aspect. Better products often go the way of Firefly, and better-marketed inferior products (and products that just make it to the market at all) win.
- Passionate users are your best asset. Treat early adopters like your highest paying customer even if they’re getting a free service and they’ll get you more business.
- Frugality rules – as above
- You need to survive two years, so have enough money for two years. You may need to sell yourself (as a consultant!) to make up the shortfall. And, by the way, your revenue projections are wrong. So is your timeline. Plan for that. If it’s not working after two year, you’re doing something wrong, so change it.
And don’t forget to watch David Heinemeier Hansson, Mercier’s other secret to success:
- Full live-blog of the event: Lessons learned: How I founded, bootstrapped, grew and sold my web startup
- Interview with Carl on incorporating in Delaware and Montreal’s tech start-up environment.
- meshTV session videos: Part One and Part Two