Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 2 down vote favorite

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?

enter image description here

SOURCE: "Bootstrapping a Lean Startup"

share|improve this question
2  
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 Aug 13 '12 at 12:12
@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 Aug 13 '12 at 12:37
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 Aug 13 '12 at 14:38
1  
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 Aug 13 '12 at 14:40
@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 Aug 13 '12 at 16:13
show 4 more comments

3 Answers

up vote 4 down vote accepted

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.

share|improve this answer
Agree, thanks for the confirmation. – blunders Aug 13 '12 at 12:51
up vote 1 down vote

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.

share|improve this answer
up vote 3 down vote

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.

share|improve this answer
+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 Aug 13 '12 at 18:20
1  
it's indeed not a methodology – Pieter Eerlings Aug 13 '12 at 18:21

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.