Bootstrapping Your Startup: My Lessons Learned
As posted on the SmartBrief Leadership Blog:
As an entrepreneur who bootstrapped my company, ReTargeter, with less than $50,000 in funding, I wanted to share some of my tips and lessons learned. Efficiency, values and community have served as the three pillars of our success from bootstrapped beginnings to growing north of a $10 million run rate.
What does efficiency mean? Leverage the 80/20 rule
What is the 20% that matters? What do we have to be doing to drive revenue? What should we not be spending time on? What is the 20% of the business that results in 80% of the profits? When you are small and resource strapped, efficiency throughout your organization is a must. Leveraging the 80/20 rule, or Pareto Principle, has been instrumental in our ability to scale.
We leveraged this theory to ensure we always focused on what was important, and we continue to do so. Always knowing where your energy should be focused projects, customers, new initiatives, hiring can help transform your organization from running at status quo to becoming a rapidly growing industry leader.
This does not stop at the organizational level; everyone in the company benefits from the ability to prioritize. When you can identify whats important to your business, your employees and your organization will run more efficiently. Because our focus was on client relationships, we dedicated a large percentage of our time to ensure each and every client received what he or she needed.
Its important to note what we didnt spend time on, as well. Until we gained traction with clients, we didnt spend time or resources on a fancy office, PR or even marketing. Events and activities that are purely for building ego were not for us. Instead, building the business was what mattered and what received the majority of our attention.
Be an early adopter
The ability to use technology, and do so intelligently, can greatly increase efficiency on all fronts. We have always invested in software-as-a-service solutions and technologies that allow for my team to be better at their jobs. We quickly adopted Chatter, RelateIQ, Followup.cc and Ongig to streamline our business processes, and I didnt wait for someone to tell me, You should be using this.
Early on, we analyzed every task and activity that was consuming valuable time and resources, addressing each with solutions that would reduce manual labor. We are open-minded and creative about when and how to use certain tools. As a result, my team can give extra attention to the 20% of the business that really matters, such as building out our product or enhancing the customer experience.
Data gathering and analytics is essential to any company. You need to regularly be tracking whats working and what isnt. We tracked our accounts in depth. We analyzed account retention, account growth, client campaigns and the overall factors that contributed to account success. This can seem like a costly and time-consuming undertaking, especially when you have a small team and a limited budget, but it doesnt have to be.
Today, we use sophisticated software, but when we began, we did our data tracking and analysis using whiteboards and other physical media. Now we are able to provide the best overall client experience, and this is largely due to the fact that we were so data driven from Day One. When you gather data on a regular basis, you can iterate without stalling progress.
Build a value-centered organization
My professional wins, including ReTargeters growth rate, stemmed from being values-centric. When I started the business, I knew that my values would be instilled in the organization. What I didnt expect was that these values relationships, humility, respect would steer the course for how the organization would operate.
Once we codified our values as an organization, they served as our guide, providing a young business with driving principles. Firing my top performing salesperson was an easy decision, because that individual was simply not values-aligned. Ultimately, letting that person go resulted in better performance across the team. Today, we continue to run as a value-centered organization, and in doing so we drive meaningful revenue.
Building a company, creating a culture, and making hiring decisions are challenging. Ive made mistakes, but our values as an organization help ensure we always move in the right direction.
The importance of community
We have all heard the adage, it takes a village. This could not be more true (or more important) for a bootstrapped company. You want to develop communities around you that will be supportive. Every relationship you have within and outside your organization is a part of your community. Maintain those relationships in way that supports your startup and your vision. You can have community around your industry, your region and your role.
We build community by aggressively investing in our people. Weve leveraged executive coaches, we think deeply about emotional intelligence, and we support each other personally and professionally. We take that collaborative ethos and apply it to every interaction we have. This has been especially important when it comes to our customer relationships. They are not just clients but members of our community, and this is demonstrated with the level of service we provide every customer, regardless of campaign size. Through supporting others, connecting people and investing in community, you build a network of support and that can only be a win-win scenario for your startup.
The challenges are numerous for any entrepreneur in the startup stage. Being bootstrapped only compounds those challenges with additional resource limitations. Look at your business and quickly cut what is inefficient, focus on whats important and find the technology that will let you work faster. Let your organizational values guide the decisions that you make, and build communities that can support what you are trying to achieve.
Efficiency, values and community have served as the backbone of our organization and have been instrumental in our success to date, and I strongly believe that they will continue to serve us well as we take our company to the next stage of growth.