Bootstrapping your startup doesn’t necessarily mean a lonely existence, in spite of the image that comes with the word. Starting a business without a pile of cash behind you just means taking advantage of the many force multipliers that the global digital economy has to offer.
The Secrets Behind Bootstrapping A Startup Success
The secrets are simple: Stick to your core competencies, outsource other functions, and work hard to stay lean. Run your startup to keep cash flowing through your bank account. The eternal principle of commerce remains true: If you run out of cash, you are out of business.
The term bootstrap was coined to illustrate the futility of having no access to external resources. Now, it has a much more positive and hopeful meaning, i.e. to improve your situation without having capital resources. Bootstrapping means finding the tools you need straight from your environment.
Keep The Core Startup Team Extra Lean
Traditionally, the easiest way to judge the stage and success of a startup from the outside has been counting heads. It’s harder to assess your headcount these days, but startup watchers at venture capital firms and the tech media still do indulge in the practice. It is easier and it looks better when they don’t see a round of layoffs.
So you cannot afford to become cash constrained to the point that you have to lay off workers; that would raise a red flag with investors immediately. Understaffing your team is a given for a startup, so don’t be afraid to stretch too few resources. Your startup employees know what they signed up for; they expect to work hard, with long hours in the early days. The rewards that motivate them are more abstract and further off in the distance.
The New Division Of Labor
You’re starting a business for a reason; there is a central skill, competence, or business model that shows promise. Unfortunately, there are all of the general-purpose business functions that go with operating an enterprise and contribute to your overhead costs.
The division of labor is simple; keep the core competencies in-house, and outsource everything else to vendors who can provide services most efficiently. So recruit the talent that is available within your budget and send out to agencies for the general services that give structure to your operations.
Your Enterprise Extends Beyond Your Company
Outsourcing opportunities arise at every level, from the hourly workforce all the way up to the executive offices of the C-suites. The financial functions of payroll, accounting, payables, and receivables are essential to companies.
Outsourcing companies that practice their professions at the highest standards can do these jobs better. Other fields such as IT support and facilities management offer many contracting options. The structure of your company as a startup has a good example to follow, in the architecture of cloud-based computing resources.
You may have a small network of the hardware that does the development work in your office workspace, but the resources you call on from the cloud are infinite. Likewise, the staffing options are available to you in-house and offshore. You can keep your core team lean and work hard while you bootstrap all of the other assets you need as if from thin air.