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What is a bootstrapper
Media mostly talks about startups that get outside funding, rarely covering success stories of self-funded projects. This is why it might seem unrealistic to get a startup off the ground with just personal savings, but actually, it is quite possible and people do it all the time.
People who finance their startups with personal savings are called bootstrappers. Unlike entrepreneurs with solid outside financing, Bootstrappers aren’t necessarily interested in huge growth right off the bat, their priorities are different.
What is a bootstrapper?
Bootstrapper is a term that we hear often in the startup community. It refers to a person or couple of people who are starting a venture with their own money, without outside funding.
Bootstrapper focuses on a very niche market, which usually does not get as much attention from bigger startups. This is the type of market that would be too insignificant for the venture capital firms that want to see huge growth soon after the initial investments and can afford to take huge risks. This allows self-funded entrepreneurs to deliver their products to the existing niche market without being crushed by powerful and well-established competitors.
When to choose bootstrapping
Boostrapping is hard work, and it is not for everyone. Self-funded projects are usually limited in the amount of money they can spend. There is Bootstrapping work for smaller business ideas, becaus ebig companies are not interested in anything that will not generate huge profits - enough to keep many people interested.
Pros of being a bootstapper
The best part of bootstrapping your startup is that you have complete freedom to follow your own vision without having to compromise or negotatie with investors. Since you are the one financing the entire project you have full control over all the decisions that you make as a startup owner. This include yor next steps, partnerships, all the marketing decision sand etc.
While some would call this a disadvantage of bootstrapping, having all the responsibility and risk on your shoulders will make you more focused - there is no safety net that is going to svae you so you have to be fully focused and dedicate yourself fully to the startup.
Cons of being a bootstraper
Since you are the only investor in this case, you are probably starting with less money then you would have with an investor involved. When it comes to startups, while money is not the only deciding factor, it can speed things up. You can get a lot done much faster when you have the finances to do it. While Bootstrapping you will have to take on many responsibilities yoruself, you can’t afford to hire 10 people right away. So it takes longer when there is less financing involved.
How to successfully bootstrap a business idea
Financing your own project means that you are responsible for following through. Bootstrappers don’t want to have 100 employees and usually aim at creating a small team of 5-10 employees, oftentimes working exclusively with freelancers.
Bootstrappers focus on a very specific issue/product and work to create a loyal community of people who have been wanting this exact service.
While the revenue will not be huge, you will face fewer risks and your profit will grow over time.
In addition to that, Bootstrapping allows for the kind of freedom that startups with outside funding often don’t have. You are fully in charge of all the decisions and will not have to compromise on your vision.
With bootstrapping the growth is slow but less risky since you are dealing with a smaller market, reinvesting your profit as you go. While you don’t necessarily have to move to bigger markets, starting with Bootstrapping and building a solid user base will then allow you to expand into bigger markets, this time with more resources and experience.
With self-funded startups, founders often want something more than just money. They have a very specific lifestyle goal in mind. With a successful Bootstrap startup, you can afford to live anywhere you want, work the hours that you want and choose projects that you believe in. You get the freedom to manage your startup and make decisions while making money for the lifestyle that you find enjoyable.