Guy Kawasaki’s recent repost of his “The Art of Bootstrapping” reminds me how much I liked it when it first came out, along with Seth Godin’s “Bootstrapper’s Bible” and Thomas Frey’s “10 Rules for Bootstrapping Your Business.” This is the real world. Bootstrapping is often the only way to start, build and grow your business.
And I probably don’t have to remind anybody about the obvious fact that we’re going to be seeing a lot more bootstrapping in the near future.
For years now, I’ve complained every so often about how we (in blogs, business plan contests, academia and entrepreneurship in general) tend to idealize the venture capital-financed startup, the SBA loan and the more formalized and carefully planned financial strategy. This is especially true in venture competitions.
And, frankly, I’ve earned the right to post about bootstrapping because Palo Alto Software, my company, didn’t get outside financing or even a straight business loan until it was already 13 years old and didn’t need it. We grew it from zero to 30-some employees the old-fashioned way, meaning we had to sell something and get the money from it before we could spend something.
It wasn’t easy. At one point we had three mortgages and $65,000 in credit card debt. That’s a nightmare.
On the other hand, having built a business through bootstrapping means that when you do it, you don’t have co-owners, investors or partners as quasi-bosses; and you don’t have to repay the bank, either. It’s yours.
There’s a lot to be said for not having debt when you get to the hard times.
And also the simple fact that the best financing is sales. Money from customers. You get to spend it, and it validates your business at the same time.