It has been over a year now since I bootstrapped my own startup. I wouldn’t say it was all very easy, but definitely it was a huge learning experience.
Like every other young high-spirited startup nerd, I was constantly deriving energy from famous entrepreneur success stories. However, what I didn’t know was there are millions of such startups who bootstrapped on their own and reached strong milestones.
In 2013, I read a book entitled Bootstrapped: How 75 Entrepreneurs Successfully Bootstrapped Their Startups and How You Can Too and it motivated me to step out of my comfort zone and give my idea a concrete beginning.
My startup, HR CUBE, underwent a lot of metamorphoses … even until today. Working on your own business idea, funding it and taking it to a stage where you can raise venture capital is a fun and rewarding experience.
Here are 5 frugal bootstrapping tips that I have learned over the course of running a startup.
1. Aim to release a MVP
A minimum viable product (MVP) is the first version of your business idea. This does not need to be ready with all the features, but ready enough to solve first tier issues. You release your MVP only to buy yourself more time to develop what your customers want from you.
With HR CUBE, I followed the same pattern. Since my target audience are jobseekers, I went ahead and spoke to every jobseeker I met. I spoke to random people in Starbucks and pitched my idea to get a feedback. It worked.
Ross Clurman, co-founder of Comnio was right when he said “People aren’t going to be interested in funding something if they don’t know what it is or what it’s going to do”.
2. Become a hawk when it comes to cash
Since you are planning to bootstrap your startup, you need to watch your cash like a hawk. Your personal expenses should be calculated so that you do not run out of cash till you raise funds. To some extent, I agree with Timo Rein, founder of Pipedrive, when he says: “Do not quit your day job quickly”. Your day job is a steady source of income and also a little relaxing.
I continued with my day job until sometime back. So, another frugal tip I would suggest is for early-stage entrepreneur to continue working your full-time job while you build your startup.
3. Outsource until you have the bandwidth to hire
You know hiring people means you need to pay them in cash or in kind. Well, being brutally honest “payment in kind” is not a valid option to consider. However, if you need to outsource projects, hire freelancers who do the the work and take payment on an hourly or flat fee basis. You don’t need to make a monthly commitment, but you can get work done when needed.
4. Reign in your buying and sell instead
Buying shiny new objects is out of question as long as it is not mandatory to move your business forward. Rather I have seen many entrepreneurs turning to Craigslist to sell things. Why does selling help? I myself sold unnecessary things I didn’t really need to make space as well as to raise quick startup money!
5. Remove “no” from your vocabulary
You are new in the market and you will inevitably hear “No” more frequently than you think. You will knock on a thousand doors and most might not be interested in your idea. But that is normal.
I spoke to more than a thousand people for more than 6 months. Most had a blank expression, while few did not want to listen. However, even if two or three people also say “great” to your idea, you know you are heading in a good direction. Learn more about those people who find value in your idea to tap more customer insights.
One thing I have learned about entrepreneurs is that there are no set rules. Every entrepreneur has a unique story to tell. However, keeping it scrappy and never giving up are the two things every successful entrepreneur will tell you.
Raising millions is not the aim, it is more about reaching millions of customers and solving a real problem. If you keep your calculations straight, stay lean, keep fit and energize your mind to do more, I am sure nothing can stop your from achieving momentum.
Money is just a reward for the work you will do. Sounds cliché! But that is what entrepreneurship is all about.
This article has been edited and condensed.
Sudhan Shanmugasundaram is an entrepreneur, technologist, career counselor by choice and a motivator. Currently he is leading a team of 24 people who work relentlessly to create a seamless online marketplace for jobseekers, mentors and hiring managers: HR CUBE. Connect with @hrcubellc on Twitter.