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WTF Is Bootstrapping?

· Startups

There are two paths entrepreneurs typically take when starting a business:

1. The X-Factor Path

With no proof that your business can actually make a dime, you pitch your heart out X-Factor style to get VC (venture capital) funding, almost lose control of the company, and have your balls in a vice until the VC firm gets its 10x return.

Your napkin business plan and straight-As co-founding team is what gets you the funding but if you don’t show how to give an ROI (return on investment), good luck retrieving your soul and getting funding for any future projects.

Play with dragons and be prepared to play with fire.

2. The FFFs (Friends, Family and Fools) Path

This direction is reserved for people who have a belief that their idea can become a self-sustainable venture by growing it in an organic way.

This process is called “Bootstrapping”.

Cash flow is the focus and actually generating revenue from day one.

This is more of a mindset and requires a disciplined approach to all facets of the business.

You spend money, like it is your own, negotiate everything hard and take pride in keeping the overheads as low as possible.

Once you have done this, you know you have a solid foundation to build a business on top of.

The Bootstrap Austin movement is run by a friend of mine Bijoy Goswami and in a city that is trying too hard to be the next Silicon Valley (people call it “Silicon Hills”), it is refreshing to see the bootstrapping movement alive and well.

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