As you're getting started with building a project, product, or side business, you'll begin to notice that there are two groups of founders - those who are self-funded (aka bootstrapped) and those who take on outside investment. There's really no right or wrong way, but you'll need to choose your own path depending on your vision, industry, and several other factors.
Today, I'll share a few tips and tools that will help you get started if you're taking the bootstrapped route. And yes, this route is hard and lonely, but it has big payoffs, such as more control over your business and vision. We'll cover everything from how to think about the investment you'll make into your fledgling business, validate your idea as efficiently as possible, how and when to think about hiring, how to prioritize product development, and even how to communicate your vision.
You may be wondering who are you and why should I read this? I'm Irma, Founder of Cafecito, and I'm completely bootstrapped and have been for the past year. I've picked up a few learnings along the way that I believe will help you have a smoother start than I did.
How much money are you willing to invest in your bootstrapped startup? I wish this was something I would've asked myself in the beginning. I went in sorta blindly and just built something. Still, I didn't stop and set boundaries on how much money I was okay with putting in and potentially losing. In my case, I was working full-time, so every paycheck, I'd set aside $300 and use that to pay a developer or to get consulting support for Marketing.
Take a look at your income and set what you're comfortable with every month. It doesn't matter if it's $100 or $10,000 a month that you'll be initially investing into your idea. Defining this upfront will be huge for your mindset and determine if you see yourself investing more or less as you grow and expand.
Some of the areas you may have to spend money on are (This varies on the type of biz)
Are you a technical founder? Non-technical? A little of both?
First, you'll want to identify your product type (software, physical, hardware, etc.). Now, what will it take to get you to a v1 or MVP so that you're able to get your product in front of an audience?
Let's say you're comfortable using a no-code tool like Bubble or Adalo to build a scrappy software v1. Great! This may cost you $50-100/month to run while you validate it. And from there, you'll need to do user interviews and collect feedback, so you may need tools like Zoom or Google Forms to collect that feedback and analyze it.
On the road to your MVP, my goal was to spend as little as possible. Why? Because I didn't know it was going to work or if people would find value. By going in with this mindset, you'll spend less, you'll also land on a simpler MVP, and you won't be putting yourself in a hole financially.
You'll stay in this phase as you validate, and over time you'll receive user requests, or maybe you'll even pivot. With those decisions you make, you may decide to hire or switch platforms for hosting and more.
Hiring is tricky, but the most important takeaway here is to understand when to hire. Usually, if your product is not highly complex, it may be 6 months or 1 year before hiring any outside help by way of a contractor, freelancer, or employee. Other products may require support from day 1 if the founder or founding team is not well-versed in marketing, development, sales, etc.
When you are bootstrapped, staying nimble is where you'll want to hang out until you hit profitability and you have margins to bring on help.
As you get going with your product, there will be a lot of prioritizing. What to work on, who to talk to, when to build X vs. Y, and more. In these cases, having a framework that helps you and your team with decision-making will make all the difference. On top of that, using a tool to manage your priorities regarding sales, marketing, and more will also keep you on track and provide you with a high-level roadmap of what's slotted for each quarter or each month.
Here are a few tools that can help with prioritizing and road mapping
Finally, what's your vision? This may not be something you have from day 1, and that's alright. You want to start forming a vision early on, though, so this becomes your North Star. It helps you as the founder and any new hires you bring on board to work towards a larger goal.
A vision can be visual on pen and paper or something more concrete like a product vision statement. A vision statement outlines why your product exists, who it's for, and how it's unique.
Try it out using this format:
For (target customer) who (statement of need or opportunity), the (product name) is a (product category) that (key benefit, reason to buy).
These areas I've highlighted above are important, but there are also many more! You may hear different buckets from different founders you chat with, and that's okay. Remember, it's your journey. And getting the buckets above outlined will help immensely when it comes to budget, vision, hiring, and prioritizing how your product reaches users and grabs a stake in the market.
Good luck! If you have any additional buckets that you ran into, tweet at me @_justirma
Irma is the product person and founder of Cafecito, making work from home human and less isolating through curated 1:1 virtual coffee breaks.