Welcome to Bootstrap
Welcome to the Bootstrap Community and glad to have you on board! From our start in July 2003 with Bijoy and about 20 fellow bootstrappers meeting at the Gingerman Pub, we have evolved into a movement. We seek to:
- Remind entrepreneurs of the low-capital path available to them
- Articulate and understand the unique rules of the bootstrap game
- Provide a supportive community where we share ideas, solve problems and collaborate
History and Context
I started the group to save myself some time - I was meeting with my fellow-entrepreneurs for coffee and lunch and thought it would be easier if we all just met up together! I also faced a distinct lack of support for bootstrappers and the bootstrap approach to building companies. In the bubble-era there was so much noise about the Venture Capital (VC) model, that it consumed all the available oxygen. This approach broadly involves: writing a business plan, raising millions of dollars, spending the funds quickly and going public/selling out in a short period of timeThere was simply no space for a dialogue about bootstrapping - and why would there be - the quick exit of the VC is so glamorous and exciting! Indeed, it was somewhat disdained - if you hadn't raised $5MM, you weren't a bona fide entrepreneur.
Bootstrapping, the Third Way
Entrepreneurship is a whole spectrum of activity and there are many kinds of entrepreneurial ventures.
Cookie-cutter ventures involve the entrepreneur implementing a pre-discovered business model. Franchises, lawyers, doctors, laundromats are all examples of this kind of entrepreneurship and comprise most "small business." On the other extreme Funding (or outcome)-driven ventures take pre-designed, but unproven business models and use capital to execute them. This approach is purely about creating an economic asset (the company) that can be sold down the line in an "exit." Various tools like business are useful for cookie-cutters and funding-driving ventures. They are usually inappropriately used for the third entrepreneurial path: the bootstrap.
Bootstrapping takes the best from both models, using the founders' unique passions and talents, leveraging constraint to fuel innovation and allow the business model to emerge from the process.
Another analogy are the three artistic styles: craft/conceptual/experimentalist as described by David Galenson in his book, Old Masters and Young Geniuses. Craft = cookie cutter; conceptual = funding-driven; experimental = bootstrap. Listen to the BootRap podcast where David speaks to the Bootstrap Art Subgroup.
Bootstrapping, in its many forms, is an approach taken by some of the largest and most successful companies out there. To name a few - Microsoft, Oracle, Dell, Virgin, HP, Whole Foods, The Body Shop. And indeed, there is evidence that a company's longevity correlates to whether it takes a bootstrap approach. (See The Living Company by Arie De Geuss.) And it's not that Bootstrap ventures don't take venture funding! It's that if they elect to do so, they do it at the right time, when they're successfully crossed the Valley of Death. Indeed, all indications are that VCs are moving back to engaging with companies in this stage of their development. This is a good thing - for the VCs, the companies and the entrepreneurs!
Realities of Bootstrapping
- The rules of Bootstrap ventures are totally different from those of funding-driven and cookie-cutters; and they can be learned! At the highest level it's about seeing and exploiting the incredible non-capital resources out there. The very lack of significant funding causes the Bootstrapper to INNOVATE. And as we go through the Valley of Death, we find the hidden pots of gold and competitive advantage. (Dell's model of going direct to the customer came out of the fact that Michael Dell started selling computers out of his UT dorm room and didn't have cash to buy parts.) And all the activities of building product, finding customers, team building, marketing, etc., are vastly different for a Bootstrap Venture.
- The nature of bootstrapping means that you start the (ad)venture and then figure out what you need as you go along. This is in sharp contrast to the other 2 paths where you take two years off to gain all the necessary skills and then start. It's much like an epic story, where the hero sets off on her journey, only to discover she needs all kinds of help along the way to achieve the goal. There's only so much preparation one can do and bootstrappers know this.
- Support and resources for bootstrappers are virtually non-existent. Why? Well, there's no money in supporting us - certainly not while we're in the Ideation and Valley of Death stages! Business schools are funded either by large corporations or VCs and this inevitably steers the focus towards studying large firms or VC-funded ones. If bootstrappers don't band together and mobilize ourselves as we have, it simply will not happen.
Bootstrap Organization Aspirations
A Community of Trust and Support
We have all experienced the incredible power that comes from being able to reach out to each other. At the most basic level, it's simply the ability to share our experiences and struggles - we know that we're not alone and there are others like us facing similar challenges. At a more practical level, we offer advice and direct help. Bootstrap Austin facilitates our community through regular monthly gatherings and various online tools. Our high-trust community is the most vital part of what makes Bootstrap valuable and it is the foundation of everything else we do.
Just-in-time Resources, Expertise
As we build our companies and go through each stage, we discover many needs for resources and expertise. Bootstrap is the place to go to fill these needs by helping each other through our knowledge and experience. We have many mechanisms to achieve this.
Knowledge: Key Models
We are guided by our mental models of ourselves and the world around us. This is particularly important in the entrepreneurial journey, both from an individual and a venture point of view. If we have a better understanding of the rules of the bootstrap game, we significantly increase our chances of success. Bootstrap offers the Bootstrap Bootcamp and supports many articulations of bootstrapping by engaging with authors and successful bootstrappers through forums like the Book Club, speakers a meetings and the Boot Rap Podcast.
An Open-Source Community
Bootstrap is evolving into a mechanism for many of our members to implement their products/services in service of the community. Through the Services Option for full membership in Bootstrap Austin, we now have 80+ bootstrappers (of our 500+ members) providing some kind of negotiated product or service to the group. Often, this is the bootstrapper's actual product or service or related to it. The bootstrapper benefits by gaining reputation in the community, experience and improvement of their product or offering. Bootstrap become a customer and Evangelist for the bootstrapper and gains in the richness of offerings for our community. If the bootstrapper has learned something through serving Bootstrap, s/he can take that learning and monetize it outside the community. Listen to a recent talk I gave on the Boot Rap, a fine example of such a collaboration!
Jonathan McCoy is helping to articulate Bootstrap's Open Source Model.
Bootstrap Organizational Structure
Bootstrap is a service provided by my company, Aviri. The network operates as a "for-profit with a non-profit/open-source mindset." Having investigated the non-profit world and consulted a number of people, it has become clear that a non-profit entity will kill what we've created and shackle the group with unnecessary structure and bureaucracy. Furthermore, we aim to keep the service as close to free as possible for members. We therefore do NOT have 501(c)(3) status and have no plans to do so in the future. We do not wish to collect donations from outside parties and true to the bootstrap way, would rather become self-sufficient by serving our customer. Moving forward, we plan to offer products and services, including joint offerings with some of our member companies.
Bootstrap is an example of an emerging set of organizations which blur the lines between public service and profit-making. We are committed to empowering and organizing entrepreneurs and educating them in the bootstrap way. Similar to Craigslist, profit-making is not the #1 priority of the organization, but self-sufficiency certainly is and will become a focus as we make our way across the Valley of Death. Just as with Craigslist, we will continue to offer a set of free services for our members, while charging for a set of others.
Bootstrap is also not run by committee or a board, one of the other benefits of not being a registered nonprofit. Members are invited and remain members by mutual agreeement and while they adhere to the organization's rules of conduct. Bootstrap always reserves the right to ask members to leave for any reason. Members who serve bootstrap in any capacity are appointed and do so in mutual agreement with myself or other leaders who have been given jurisdiction over certain aspects of the organization.
Bootstrap charges its members in Bootstrap Karma, Bootstrap's Complementary Currency for participation in all Bootstrap events.