I’ve been working with start ups, both my own and others for almost 12 years. My preference is towards lower risk start up models such Eric Ries’s Lean Start up approach. This is my short summary of how to bootstrap a start up. Although, these days I prefer online consumer facing start ups, these principals can still apply to B2B and offline start ups.
Its just a concept. Don’t get too attached. Be prepared to throwaway all your initial ideas and start again or abandon everything together and start afresh.
Don’t put all your eggs in one basket. Have other sources of income but focus around related areas to your startup
If you get traction, be prepared to drop everything else.
Customer development (Marketing)
Your goal is to get a customer to pay money upfront, month after month and to promote you to their friends and colleagues who do the same.
Test, test and test some more the until you have the following:
- Can you drive traffic to your offer
- Can you get pople to pay you for it.
- Can you get them to keep paying for it (recurring revenue model)
- Can you get them to tell other people
- Can you scale this model.
Ries talks about a minimum viable product. Your product should be as low cost as you can get away with. This could be simply be a mockup or a single feature. Time and time again I see that people will pay money for an idea if it appeals to what they want. A product doesn’t have to be finished yet. Charge first, deliver later.
For development or delivery, source services from cheaper parts for the world if you can. Use contractors rather than incur overhead.
Have another revenue stream – expect to not make any money from this for quite a while. Don’t invest more then you can lose. Pay by the month, don’t commit to any infrastructure or overhead. Don’t own any inventory unless its for something already sold.
Understand that if you can’t deliver what’s been purchased you are going to need to refund your customer.