(Note: I posted the following on my LinkedIn page earlier today and decided to repeat it here. It was entitled, “Bootstrapping: Why Do Entrepreneurs Do It, and How?”)
The word “bootstrapping” actually has several meanings according to Wikipedia. But in a business context, it means “to start a business without external help (capital).” You can read more about that specific meaning, also called “bootstrap funding,” here on Wikipedia — lots of helpful information there. Okay, now that I’m sure you know what it means…
What got me thinking about bootstrapping recently was tripping on an old blog post of mine, which is still very timely in our current startup climate. It was called “Raising Startup Money? Here’s 20 Ways.” Note the “Big List” included in that post, called “20 Way$$ to Feed Your Startup Habit.” A large number of those 20 ways fit into the spirit of bootstrapping. Yes, the money you save as a bootstrapping entrepreneur is as good as any other money — maybe better.
Before I wrote that piece above, I got inspired about bootstrapping by a blog post written by a guy named Jeff Cornwall. He heads the entrepreneurial studies program at Belmont University (and used to teach here in the Twin Cities at the University of St. Thomas). That blog post was entitled “Why Do We Bootstrap?” The interesting thing Dr. Cornwall said he’d found in his work was that entrepreneurs bootstrap for a wide variety of reasons, and only some of them relate to necessity. Some just do it because they like it, I guess — and to allow them to keep more ownership of their company, which is no small benefit. (Jeff’s web site is here, and he also runs a well-followed community site called The Entrepreneurial Mind.)
The other reason I find the topic of bootstrapping interesting is that I’ve practiced it myself and worked with many founders who’ve done the same over my 30+ year career working with tech startups. In addition, I think there’s especially a need here in the Midwest for founders to get more educated on this topic. Why? Because, try as we might, startup venture funding is never going to flow as freely here as it does in Silicon Valley, or Boston, or Austin, or you name it.
Entrepreneurs in these parts, and in so many areas of the country away from the major VC hubs, have to be one thing above all else: clever. And there’s a lot they can learn from people who study this phenomenon, and people who’ve practiced it for a long time. We have tons of those here in Minnesota (and all over, really) — serial entrepreneurs who’ve proved bootstrapping works. Many of these folks are friends of mine, and they’ve accumulated a large amount of knowledge on bootstrapping based on hard experience. The key, of course, if you’re a budding entrepreneur, is to learn how to tap into the expertise of those folks — find them and learn from them. (Think mentors.)
Let me also suggest a couple of great, short books on bootstrapping. Dr. Jeff Cornwall, mentioned above, published one in 2009 simply called Bootstrapping. Way before he published that book, he recommended one by Seth Godin, called the “Bootstrapper’s Bible.” It’s certainly not a new book, but no matter — it’s a timeless classic. (Here’s some background on it from Seth’s blog.
But, wait — here’s a big tip for you: don’t buy it. That’s right, save your money! Because you can download an ebook version of it that Seth published for free. He calls his ebook a “manifesto” and you can get it as as a PDF file right here.
How’s that for a bootstrapping move! Go grab it while you can, before Seth changes his mind. Then, read up, go forth, and continue bootstrapping your way to startup success. Ka-ching!