Becoming a Bootstrapper

Written on September 8, 2008. Written by .

Suspension
Strategy for your first business.
Photo courtesy of bardamu_13

You know how people always say “Do what you are passionate about”? Well I think this might be good advice or bad advice depending on your interpretation. I’ve thought a lot about this and I’ve gone back and forth many times, but I think I’ve finally come to a conclusion. I decided that stubbornly taking the most direct route to your passions is usually a bad idea. The problem is that most people are passionate about things that are not easily marketable. Either they are not in high demand or they are too difficult to achieve. A lot of people are passionate about art and that is why there is more artwork created than is bought. And I’m sure a lot of people are passionate about space travel, but it’s not exactly a reasonable initial business venture.

Of course there are success stories like Google where a relatively ambitious project met with incredible success. But one should consider that such cases are the rare exception and not the rule. Also, making a search engine is not nearly as difficult as making an operating system to compete with Windows/MacOS or a processor to compete with Intel. Most businesses start with very down-to-earth plans. The lucky ones evolve into something that might seem totally pie-in-the-sky.

So is the conventional wisdom of following your passions totally wrong? I think it is partially correct in that you should try to look for business opportunities that will naturally lead you toward your passions. So if you want to start a university, maybe you can start with a tutoring agency. Or if you want to develop an operating system, maybe you can start by developing system tools for other operating systems.

At this point you might say “I don’t want to waste my time on a simple business. There is a lot of competition for simple businesses and my abilities would be best utilized on an ambitious project.” My response is that it isn’t a waste of time. Your initial business will provide you with experience and extra capital that will significantly increase the chances of success of your future business. Think of it as a training exercise where you get to prove that you can handle running a business. Even if it takes many years, your first lesson is the ability to get a venture up and running. Perhaps you will have to abandon your first idea and start from scratch, or maybe even abandon several ideas, but somehow you need to learn how to find good ideas. This is how to become a bootstrapper.

Bootstrappers are not just regular business people. Most successful business people are just lucky to have found a profitable niche or generous investors. Bootstrappers on the other hand operate on a different level. They can see how to exploit a market in any condition. They didn’t just stumble into a successful business, they engineered their way into it, and they could do it again if they had to.

I think a general rule of thumb would be to pick a business that will have users within three months. It doesn’t have to be profitable, but if nobody is using it then it will be harder to stay motivated. Users provide both essential feedback and a feeling of responsibility. If it is going to take longer than three months to roll out a usable product or service, then there is a good chance that the idea is too complicated and it will probably take even longer than you expect. And since most businesses fail, you are gambling with a bigger chunk of your time if it takes that long.

The bootstrapper’s school is the market. It is probably the best school there is. You learn fast, you never have to go to class, you are only graded on your objective performance, and instead of earning letter grades, you earn real money. Don’t worry about being successful or doing something amazing the first time through, just go to school in the market and get a simple successful venture started. Ideally it will be one that can evolve into the business of your dreams, but if not then you can always sell it and walk away with some fresh capital for your next idea.

To read more about bootstrapping, check out The Bootstrapper’s Bible.

Read more from the Personal Finance category. If you would like to leave a comment, click here: 2 Comments. or stay up to date with this post via RSS from your site.
Social Bookmark : Technorati, Digg, de.licio.us, Yahoo, Blinkbits, Blogmarks, Google, Magnolia.

© Copyright thrive by design - Powered by Wordpress - Designed by Speckyboy