What mitchell is saying makes little sense. he is already vastly wealthy and isn't under the gun to pay rent and bills. Aside from that this is a great article for a very wealthy second time founder to read.
I think it's a great article for first-time founders as well. It is extremely fashionable right now to raise a shit-ton of money early on. Too many novices think that's basically the only way companies happen.
I agree that bootstrapping is easier for people with capital. But hopefully nobody is starting a company without at least some money in the bank. That means that everybody starting out should be asking, "Is there some way we can get to revenue with what we have?" Mentoring at events, I've seen companies get revenue literally in the first weekend of their existence, so it's not impossible even on very modest budgets.
Even if the answer is "no", I think that strongly considering it helps people build better businesses. There's a terrible tendency for people to delay contact with the market until they're "ready", but nobody is ever ready for that, not the first time.
Off the top of my head, I think plenty of service businesses start out this way. E.g., consulting companies, legal firms, cleaning companies, hair salons, etc. Sometimes they start accidentally: a person does a friend's tax return or a little legal work on the side from their day job. Eventually they build up enough of a reputation and a client base that they say, "Now let's make it official."
I think the same trick can be pulled off with food. A good SF example is the Creme Brulee Cart:
It started out with one tiny handmade cart, grew up to a food truck, and eventually added a physical store.
For startups that are service businesses, the Concierge MVP is a great example of ways to go after early revenue. For example, consider a friend's startup:
Well, they bootstrapped to 7M for the first one. I suspect he knows what he's talking about. The title is a little weird. He seems to imply that he didn't bootstrap the previous one.
Comments
What mitchell is saying makes little sense. he is already vastly wealthy and isn't under the gun to pay rent and bills. Aside from that this is a great article for a very wealthy second time founder to read.
I think it's a great article for first-time founders as well. It is extremely fashionable right now to raise a shit-ton of money early on. Too many novices think that's basically the only way companies happen.
I agree that bootstrapping is easier for people with capital. But hopefully nobody is starting a company without at least some money in the bank. That means that everybody starting out should be asking, "Is there some way we can get to revenue with what we have?" Mentoring at events, I've seen companies get revenue literally in the first weekend of their existence, so it's not impossible even on very modest budgets.
Even if the answer is "no", I think that strongly considering it helps people build better businesses. There's a terrible tendency for people to delay contact with the market until they're "ready", but nobody is ever ready for that, not the first time.
I'd love to read either your writing or case studies of fast-to-revenue companies if you have any to share. Thank you.
Off the top of my head, I think plenty of service businesses start out this way. E.g., consulting companies, legal firms, cleaning companies, hair salons, etc. Sometimes they start accidentally: a person does a friend's tax return or a little legal work on the side from their day job. Eventually they build up enough of a reputation and a client base that they say, "Now let's make it official."
I think the same trick can be pulled off with food. A good SF example is the Creme Brulee Cart:
http://www.thecremebruleecart.com/story/
It started out with one tiny handmade cart, grew up to a food truck, and eventually added a physical store.
For startups that are service businesses, the Concierge MVP is a great example of ways to go after early revenue. For example, consider a friend's startup:
http://amazingairfare.net/
This is the kind of thing that at scale would require sophisticated software. But for a small number of people, you can just do it manually.
Another good concierge MVP example comes from my colleagues at Code for America:
https://www.youtube.com/watch?v=lqTFi2U2Ebc
They aren't getting revenue here, as it's a public service, but you can see how the manual-to-automated approach can work incredibly well.
If you're near to one, consider dropping by a Bootstrappers' Breakfast:
http://www.bootstrappersbreakfast.com/
Thank you very much.
Well, they bootstrapped to 7M for the first one. I suspect he knows what he's talking about. The title is a little weird. He seems to imply that he didn't bootstrap the previous one.