The 3 most important lessons I learned as a bootstrapped founder – The Next Web
Let me start with a bold statement. You can build a SaaS company from the ground up, without any outside help.
And the best thing is, you dont need luck or privilege to bootstrap. You can achieve it with tons of blood, sweat, and tears along with valuing every penny and using every resource at your disposal. Then after some trial-and-error, youll get there.
I had an idea, and I made it a reality. Scratch that, Im making it a reality. I cant say Ive made it as a bootstrapped entrepreneur, but I can happily say that Ive gotten some of the way. Ive spent some of the blood, sweat, and tears required to make it happen, and Ive got plenty more to spend but also some advice to share.
So heres what Ive learned from my bootstrapping journey.
Lets set the scene to have some proper context. There I was, a 20-something coding know-it-all, working for an enterprise-sized CRM system. My job was to travel around the US and Europe, implementing, training, and picking up big fat invoices from customers.
Sounds like a sweet gig? Thats because it was. I was blessed to travel, doing something I loved, and something I was good at. I was extremely comfortable but then I gave it all up. I walked away.
I always had one question simmering away at the back of my mind, nagging away at me: why?
Why couldnt CRM be as simple as a Chrome extension, like Skype, for example, and why was it so expensive for these customers? We were training people in dozens of different processes, but the teams only used one or two of them. Why didnt the technology bend to fit existing processes rather than processes bending to fit a CRM? Lightbulb.
Six years later and I want to impart what Ive learned since then. Specifically, I want to speak to my bootstrapped peers about what I see as more valuable in business than somebody elses money.
Above everything, our people are at the heart of our business our team. Maybe its different for you, but I quickly realized that I couldnt be everything to everybody.
I had the coding credentials, but Im far, far away from being a marketing expert. Im a good communicator, but have I got the steel nerves I need to deal with something negative somebody says about my product? No way. Besides, theres not enough time in the day for me to do everything.
Thats why to borrow some startup jargon our employees areat NetHunt T-shaped. Now, whats that supposed to mean?
It means I look for people who arent specialized in just one thing (I-shaped people), nor generalist jacks-of-all-trades (dash-shaped people). The people we hire at NetHunt specialize in their primary role but can fulfill other tasks as and where we need them.
We cross-train and educate each other around our specializations, which improves our communication, and provides a better buying experience for our customers. Our T-shaped teams are excellent at adapting to fluctuating demand, which is crucial in the post-2020, post-pandemic business climate.
Theres also one incredibly important fact every bootstrapped founder needs to know: team size is not equal to success. So you dont necessarily have to spend more money to improve your team, but you need to make sure your processes are optimized for success.
I try to solve that by focusing on untethered communication between our teams. We run daily stand-ups to know what others are doing and have one big cross-team meeting to keep each other in the loop. Our teams are aligned under a shared-informational environment, and they have the tools to back up their existing skills.
So to sum up, if you tell me I need money; I say no. I need people.
You cant set out a business simply upon the strength of finance. However, you can set out a company based on the strength of feeling that people generate when theyre devoted and theyve got the skills to execute an idea.
As a bootstrapped entrepreneur, its essential to have a good nose for the right people to propel your business forward.
Its easy to tap out early on; after the honeymoon period is over, and the novelty of living your dream and working for yourself has worn off.
When you look at these tech-juggernauts, with their mega-campuses in Silicon Valley and marketing budgets bigger than we can imagine, its easy to think: whats the point? Ive been there, and I think weve all probably been there.
It might not seem like it at that point, but being a small business has its advantages. For example, its much easier to build better relationships with customers when youre just starting out. We can avoid awful, transactional communication and speak to them like humans and friends.
We can listen to their feedback, act on it, and close feedback loops quickly. We can prioritize individual customer success, which is the underlying foundation of business success in the SaaS industry.
Similarly, things are much easier among a small team. Sorry, but Im going to use the C-word again communication. Thats what it all comes down to.
The smaller the team, the clearer the vision is, and the less diluted your final goals become. At NetHunt, were close, almost like a family. Everybody knows each other and talks to each other about life when theyre stuck in the elevator together. Problems get solved because were honest and constructive with each other.
Ditch that megalophobic feeling when you look at Apple, Google, or whoever else. As a small, relatively underdeveloped business, we hold an advantage ourselves. Sure we dont have the financial backing that these guys do, but weve got the flexibility they cant afford.
Change things up while you still can: pricing, product UI, and branding. Experiment. Dont be afraid of your churn rate rising, but believe that your service brings value to customers and their work.
Competition is good because it means that a market exists for your product. We use competition to push us closer towards the boundaries of what we can do; we use our competitors as inspiration for what to do next.
As a small business, its your job to find sanctuary amongst all that competition, a place within the competition where there is no competition. The eye of the storm is your niche.
But being a smaller player, you must choose your battles wisely. Pick a few marketing and acquisition channels, scaling them as your business grows. Otherwise, youre everywhere but spread so thinly that youre nowhere.
As a cost-effective and relevant method of lead generation and education, at first, my team and I decided to focus on content marketing and its inbound and outbound distribution. Every piece of content we put out brings us closer to our niche.
Specifically, we care about SEO and our Google rankings. Users who find us through these channels tend to maintain a high buying intent; they already know what they want a need. Its a long game, but were playing an even longer one at the moment as we try to conquer YouTube and video marketing. In every video, we try something different; a shorter intro or a CTA in another place, and in every video, we learn something new that helps us.
Keep an eye on the prevalent trends in your industry; know which marketing and acquisition channels work. Sure, your larger peers have got the budgets to attack those trends, but they also run on massive, often rigid systems with a lot of red tape. If you attack it early enough, you can settle into that niche before they manage to find it.
Thats anyones guess. Personally, Im hungrier than ever after six years of building my own company. Ill continue to iterate my growth strategies, looking for that key growth factor. Ill never stop looking for that perfect product-market fit, and I know my team wont either. Business never sleeps; it continuously evolves.
Trends come and go; audience preferences change, and our product must keep moving with the times. With my team behind me, I know that anything is possible for the next six years as long as we continue to follow the same formula towards success:
Hypothesize, implement, measure, conclude
Its more than possible to build a SaaS company from the ground up, with no outside help, and bootstrapped. Good luck!
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The 3 most important lessons I learned as a bootstrapped founder - The Next Web