Right Action Right Time

Friday, September 28, 2007

Bootstrapping, not just for tech

The bootstrap process - Demo/Sell/Build - can be applied to ventures in many industries. At Bootstrap Austin we have subgroups in art, publishing, film, health, nonprofit, and food.

What does it mean to bootstrap a book? Rather than focus on finding a publisher, the author creates their demo and takes it directly to customers. In the case of The Human Fabric, Dave and I wrote the first chapter and released it on the website. Customers who purchased the book at this early stage were offered a steep discount. We released each successive chapter and engaged our readers soliciting their feedback. The feedback improved the final product and guided the direction of the book, while the price increased with each new release. The Bootstrap Publishing Subgroup, led by Thom Singer, will share our experiences at BookPeople on Oct 7.

Bootstrapping presents viable alternative in other industries. Rather than go for a record deal, a band creates a demo, sells it directly to its fans and builds an organization around it (Righteous Babe Records). Rather than go to a studio to fund a film, filmmakers make it themselves and seek out niche audiences (Flatland). The excellent film, Before the Music Dies, deals with the demise of the record industry as we know it. Appropriately enough, it's a bootstrap film, distributed by another Bootstrap Austin Member, BSide. Long Tail distribution mechanisms like iTunes, YouTube, amazon.com, BSide, eBay, enable the bootstrapper to get their product to their customers. These demo/sell/build platforms are in turn causing a shift to more bootstrap-friendly formats - music singles, short films and ebooks.

Monday, September 24, 2007

Discussion from Bootstrap vs VC on BootstrapONline

A nice discussion is emerging on the Texchange group on BootstrapOnline after last week's debate.

Friday, September 21, 2007

The 5 Stages of a Bootstrap Venture

Bootstrap ventures go through five distinct stages of development: Preideation, Ideation, Valley of Death, Growth and Rebootstrap. Each of the first 4 stages corresponds to the birth of a crucial element of the venture - bootstrapper, product, customer, organization - with a corresponding key action to accompany it - awaken, demo, sell and build. The successful completion of a particular action naturally leads to the next stage and forms the basis of the next action.

In Preideation the sole focus is the awakening of the bootstrapper to their passions and talents. None of the other elements require any energy - it simply isn't time yet. In Ideation the bootstrapper element continues with the quest for a complementary partner. Using the terminology of The Human Fabric, an Evangelist (Steve Jobs) and a Maven (Steve Wozniak) come together. Led by the Maven, the partners focus on the key action of Ideation - creating the demo (Apple I). The demo is a first version of their imagined product or service. The Valley of Death (VoD) begins when the founders go full-time on the venture. The Evangelist takes the demo and searches for customers (the Byte Shop) - anyone who will pay for the demo. Through the feedback from customer conversations the Maven evolves the product, moving it from alpha to beta to version 1. Meanwhile, more bootstrappers might get added to the team. Emerging from the VoD with positive cash flow, it is time to shift focus again to building and scaling the organization in the Growth stage. A basic organizational structure likely first emerged in Ideation when the partners created their agreement, but it was not time to truly focus on organization-building until now. With the emergence of the business model, key functions such as Marketing, HR and systems are created. The fifth stage, Rebootstrap, is the spawning of the next products and services for the company. See the stages and actions play out for Apple Computer.

From the above discussion we come to understand the key principle of bootstrapping - right action right time. Like a good parent, the founders' job is to understand the stage of the venture and take the appropriate action for that stage. Sometimes that might even mean moving backwards! We also see how certain commonly-accepted actions such as business planning or fund-raising from investors are taken inappropriately.

The master bootstrapper rises above the need for strict definitions of stages and actions - they develop an intuition for the process and take the right actions, trusting they will learn from each and discover how to proceed. For them everything occurs in its right time as well.

Here's a 5 min Youtube video from the Bootstrap Bootcamp explaining all the bootstrap stages.

Thursday, September 13, 2007

Weekly bootstrap post on BD Tech Daily

I'm thrilled to participate in Business District's Tech Daily newsletter with a post every Friday.

Bootstrapping is often contrasted with the VC model of entrepreneurship and much of the discussion centers around avoiding funding from investors. This commonly used definition falls far short of the true essence of bootstrapping. Through an ongoing study of numerous bootstrap masters and working with my fellow-bootstrappers, I have come to understand it in a very different way. Phrases like: right action right time; constraint creates innovation; use everything; power of 2; demo/sell/build - all hint at what is really going on. Bootstrapping is simple yet mysterious, obvious yet subtle, tactical yet enduring. Neither cookie-cutter nor funding-driven, it is a third way of entrepreneurship involving the modern heroes' journey. Bootstraps might start out looking similar to other businesses, but quickly evolve into unique entities. They might even take funding, but it will be to scale rather than develop the business. Their "competitive advantage" lies in the accumulated steps taken in their thousand mile journey.

In the coming weeks and months we will embark our own journey of discovery. If I do my job right you will examine and question your current assumptions about entrepreneurship and bootstrapping and find your own answers at the end of the yellow brick road.

In the mean time, you might start by picking up a book from my recommended list, reading the Bootstrap Austin wiki, or attending my upcoming Texchange "debate" with Tom Ball on Sept 19th .

Monday, September 10, 2007

Interview on Business District Radio Show

Jason Myers - founder of Business District Magazine, Marcy Hoen - founder or Austin Art Start, and Bijoy discuss bootstrapping, particularly the PreIdeation and Ideation stages on Business District's talk radio show. Master bootstrapper Richard Branson was highlighted, including his book, "Losing my Virginity," covered by the Bootstrap Book Club.

Here's the podcast.

Sunday, September 09, 2007

Bootstrap vs. VC at Texchange

I'm looking forward to a conversation with Tom Ball from Austin Ventures at Texchange next week. We had an enjoyable lunch and found that we agreed more than we disagreed, so it will be a very interesting discussion! Business District Magazine will cover it for their October issue and it will be on the BootRap Podcast.

We have also created a Texchange group on BootstrapOnline, our social network, which we recently opened to anyone interested in connecting with the bootstrap community. The group is moderated by Linda Ford, a member of Bootstrap and Texchange.

Friday, September 07, 2007

Bootstrap Austin Launches Online Social Network

The Bootstrap Austin community is generated through contributions made by its members. We encourage our members to become Contributors, using the community as a platform to develop their products and services while serving their fellow-bootstrappers. This has resulted in many outstanding initiatives within the community and also aided in the development of unique offerings by bootstrappers for their customers.

Once such contribution is our social network, BootstrapOnline, powered by Small World Labs. SWL provides technology and expertise to develop private-label social networks akin to mySpace and Facebook.

Bootstrap has recently opened BootstrapOnline to the general public in order to increase the connectivity between the bootstrap community and those interested in working with bootstrappers. Anyone interested in bootstrapping or connecting with bootstrappers can join the network and is encouraged to do so.

Organizations engaged in supporting entrepreneurs are also represented with their own groups on the network. Organizations already signed up include: ATC, SBDP, Rice Alliance, TiE Austin, Texchange, FLOW, EO, DCI, HBMG, ATI, Acton MBA, AIBA, SCORE, ACA, AWTA, AIEA, Business District, EFF, CTAN, PeopleFund, BSC, WFS, LES, ICF, Technology groups include JOOMLA, Drupal, Webmopac, Agile, and Ruby on Rails. Economic Development organizations around the region include Seguin, San Marcos and Matagorada, with more to come.

In a recent article in Business District Magazine, I encouraged the Austin community to "come together right now! (over us)." We are excited to offer BootstrapOnline as our way to help weave together the fabric of the entrepreneurial community. It is our hope that this will foster Austin and the Central Texas region toward the cause of creating more successful home-grown innovative companies.

If you are interested in participating, please join BootstrapOnline now and get involved! And, of course, invite your friends.


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