Is bootstrap a startup development methodology?
I've always understood bootstrapping in the context of startups to mean that the business achieves sustainability through customers, not loans, equity deals, etc.
Ash Maurya has a blog post from a few years ago that appears to define bootstrapping as the above, plus that the product is developed without any customer feedback before the product is ready to sell.
To me, this sounds like the "Lean Startup" myth, that being before the lean startup approach that startups did not talk to customer before they had a product to sell.
Is Ash Maurya's use of the term bootstrapping a commonly understood use of the term?
SOURCE: "Bootstrapping a Lean Startup "
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I don't think bootstrapping has anything to do with customer feedback. It's purely a financial thing... e.g. we have not been funded (by choice or predicament) and thus the project is bootstrapped. I know many bootstrapped projects that did get prospect/customer feedback. – Scunliffe 12 years ago
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@scunliffe: Agree, though at least based on my reading of Ash Maurya's blog post and the graphic from it that I added to my question above, he appears to be saying that bootstrap means build then sell; which to me is a misuse of the term bootstrap. Basically, it's easy to find sources using the term correctly, I haven't found any using the "build then sell" usage. – Blunders . 12 years ago
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Well that still has to do with financial, although I don't think he explains well. Build and sell is in a way applicable. Most startups try to get financing well at startup, before anything is fully developed. A bootstrap will get the development and marketing out of the way, and start seeking funding once everything is set. I think this is the best way, alas much harder to achieve. It's more valuable for everybody, since the entrepreneur is getting more money for giving up less equity, and the investor is getting a company with a proven product. – User60812 12 years ago
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Additionally, investors will look much more favorably at a bootstrapped company, since the entrepreneur put up his own capital, and will be much more careful in its operation. As much as people will disagree, a lot of startups get reckless in operations, due to people not "playing" with their own money. If you fail there is no loss, however if you own capital is invested, if you fail you lose something personal. – User60812 12 years ago
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@user60812: Your comments appear to be on the value of financial bootstrapping, not if bootstrapping is a methodology, correct, or am I missing something? – Blunders . 12 years ago
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Well it is a methodology, I was trying to differentiate for you from the "standard" startup definition, but yes I am also emphasizing the benefit. – User60812 12 years ago
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Removing financial concepts from the topic, would you still say it's a methodology? To me, the blog post and graphic appear to be saying that bootstrapping is a way to develop a startup idea, which in my opinion it's not; meaning it's just a way to finance a startup. – Blunders . 12 years ago
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I wouldn't say that bootstrap in it of itself will develop an idea. However, bootstrap will develop the company in a different way than a typical methodology I think. You can't really removing financial aspect from it, since that's the core of bootstrap. Using your own capital will force you to monetize the idea quickly, to replenish your own resources, unlike pre-release funding, allows you to perfect an idea before monetizing. This with bootstrap, is you would develop with the business process in mind, and traditional you would develop with the user base in mind – User60812 12 years ago
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@user60812: Yes, I know -- but nothing within the definition of bootstrapping requires you build something then sell it, which appears to be the way the blog post and graphic define it as being. Point being while bootstrapping (or for that matter capital injection) may effect a startup's development, it is not a methodology for developing a startup; unlike the lean startup methodology. – Blunders . 12 years ago
3 Answers
I believe bootstrapping to be purely about funding (or lack of external funding to be precise).
When and how you get customer feedback is unrelated to the "bootstrapping" term.
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Agree, thanks for the confirmation. – Blunders . 12 years ago
Bootstrapping = growing your business from profit (instead from outside development). I have been (successfully) bootstrapping a web app software (service) business, and now I'm bootstrapping product businesses. Bootstrapping a service business is quite easy: just find a first customer, and there you go.
Bootstrapping a product business is much more difficult though. It requires a big upfront investment, as a product pays it back over time. However, a product is scalable, while service business is not.
What I love so much about Bootstrapping is that you don't owe anything to anyone, it's 100% your own business, and the fact that you can turn 0 dollars into several thousands of dollars with only your time as input, is amazing.
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+1 Thanks, though the question is not what is bootstrapping, but what it's not; in this case a startup development methodology. Do you agree, putting aside the effects that bootstrapping capitalization has on the development of a startup (or for that matter capital injection) that it is not a methodology for defining what a startup is? Again, thanks! – Blunders . 12 years ago
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it's indeed not a methodology – Pieter Eerlings 12 years ago
As Joel said, in my understanding Bootstrapping is purely about financing. Basically using your own capital to fund the company until you generate enough revenue to attract investors, contrary to a typical startup attracting investors pre-revenue stage.
