By Miten Shah.
The Indian Space and Research Organisation proved to everyone that bootstrapping can take us further than the moon, all the way to mars.
I believe bootstrapping is not only something that startups need to do – even large corporate, and governments must bootstrap as a critical element to ensure growth.
Obviously bootstrapping conserves the oxygen of every business, funds and budget. But if that the only reason you are bootstrapping you are defensive, and not able to fully benefit from the strategy.
By bootstrapping aggressively, in the pure Spartan sense, you focus on only what is important and critical. You focus all your energy on building muscle, not accumulating fat.
When food is scarce, no one will use eatable food to decorate a meal. Why use the most important resource of a company, its time and money, on things that are not important?
Even those companies with a healthy 8% net profit margin, will need to do 12 times the sales of the money they spent just to have a net effect.
With information so easily available, most of what “experts” can offer is achievable by generalists who have a desire to find a solution. Experts are obviously important and will add value, but should be used only when their return on investment is incremental, and something that is not a core function of the business in the medium to long term.
Bootstrapping aggressively will ensure the company focuses on its strengths; it thus has a clearer objective. This clarity on its offering, and focus on its niche will create a sense of simplicity that will attract customers.
It conserves cash, but it also builds knowledge within the organisation. Thus building of knowledge is an investment in the long term – but it uses up time in the short term. And when survival is not guaranteed in the short term, it is a very difficult choice to make. Time must be budgeted as well to focus on those areas where the return will outshine the investment.
Effective bootstrapping requires detailed analysis of the business metrics. This will give you a clearer insight into your businesses; you will understand what is working and what is not. It will not only give you an indication of when you need to pivot, but also a road map of which direction you need to pivot to.
It will keep your feet on the ground, and keep you more in touch with your environment.
Bootstrapping will allow you to delay looking for outside investors – less weight and people in your car, will of course allow it to go faster. We all know how confusing it is to drive a car when everyone wants to go to a different destination, and has a different road planed out. The longer you drive solo, the further you will go, if you are in the right direction or not – that is a different question all together.
Using bootstrapping aggressively will allow you to go faster and safer simultaneously.