Comments on: Bootstrappers unite! http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/ The Startup Blog Network Thu, 18 Mar 2010 02:24:41 +0000 http://wordpress.org/?v=2.7 hourly 1 By: James Clark http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-500 James Clark Thu, 26 Oct 2006 15:44:37 +0000 http://ColoradoStartups.com/?p=144#comment-500 I'm a big believer in proving the model and generating positive cash flow. There is something about the universal principle of acceptance and adoption that has no ties to funding at all. Does the product or service meet a fundamental need in the market? If so, people will buy it. If it's really got potential, people will tell other people to buy it. We had a client that really loves our work ask us recently if we were cash flow positive. We started laughing. Our answer, "If we weren't cash flow positive, we wouldn't be here." Thanks for the tip of the hat to the bootstrappers. I’m a big believer in proving the model and generating positive cash flow.

There is something about the universal principle of acceptance and adoption that has no ties to funding at all. Does the product or service meet a fundamental need in the market? If so, people will buy it. If it’s really got potential, people will tell other people to buy it.

We had a client that really loves our work ask us recently if we were cash flow positive. We started laughing. Our answer, “If we weren’t cash flow positive, we wouldn’t be here.”

Thanks for the tip of the hat to the bootstrappers.

]]> By: David Cohen http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-497 David Cohen Thu, 26 Oct 2006 03:08:07 +0000 http://ColoradoStartups.com/?p=144#comment-497 I know Tiffany (of Hopscotch) personally, and know about you guys - also saw that PCMag writeup. Drop me a note and tell me more at david at coloradostartups.com! I know Tiffany (of Hopscotch) personally, and know about you guys - also saw that PCMag writeup. Drop me a note and tell me more at david at coloradostartups.com!

]]> By: Paul Wenig http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-495 Paul Wenig Wed, 25 Oct 2006 18:29:53 +0000 http://ColoradoStartups.com/?p=144#comment-495 I have been working with a start-up that defines bootstrapping. Boulder-based Hopscotch Technology. We are a consumer electronics company that has developed, designed, manufactured, and launched a new product category while managing an embarrassingly low burn rate of an angel investment. Our vision permeates through such that we have $10/hour interns who drive from Denver each day! We are on track to have national mass-merchant distribution in time to leverage some incredible PR, marketing and partnership opportunities that will result in sales of $20M by year 3. Bootstrapping does work, although the sub-$99 hotel rooms get old quickly! I have been working with a start-up that defines bootstrapping. Boulder-based Hopscotch Technology. We are a consumer electronics company that has developed, designed, manufactured, and launched a new product category while managing an embarrassingly low burn rate of an angel investment. Our vision permeates through such that we have $10/hour interns who drive from Denver each day! We are on track to have national mass-merchant distribution in time to leverage some incredible PR, marketing and partnership opportunities that will result in sales of $20M by year 3. Bootstrapping does work, although the sub-$99 hotel rooms get old quickly!

]]> By: Dionea http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-459 Dionea Wed, 25 Oct 2006 06:27:27 +0000 http://ColoradoStartups.com/?p=144#comment-459 Timing is everything, and frequently we forget that as entrepreneurs we can be years AHEAD of the market. I riffed: http://dionea.wordpress.com/2006/10/24/the-competition-is-never-as-close-as-you-think/ Timing is everything, and frequently we forget that as entrepreneurs we can be years AHEAD of the market.

I riffed:
http://dionea.wordpress.com/2006/10/24/the-competition-is-never-as-close-as-you-think/

]]> By: David Cohen http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-458 David Cohen Wed, 25 Oct 2006 02:49:06 +0000 http://ColoradoStartups.com/?p=144#comment-458 Bootstrapping is absolutely the way to go if you can do it. This is probably the first piece of advice that I give almost everyone who is seeking angel funding. Why not bootstrap this thing? Invariably, the reason is "timing" - we have to get this thing to the market now, before somebody else does it! The competition is never as close as you think, and even if they were, it's about who executes better anyway. I love bootstrapped companies. The founders are usually much happier and less stressed out, and end up (obviously) with more ownership, which they deserve if they've been able to build it this way. The $20M reference is annual revenue, and you're right that this is just one measure of success. I have found it to be a good cutoff point for judging companies who are on the national or worldwide stage. It certainly doesn't mean smaller companies aren't creating real and valuable meaning in our society, and I didn't mean to imply that. Bootstrapping is absolutely the way to go if you can do it. This is probably the first piece of advice that I give almost everyone who is seeking angel funding. Why not bootstrap this thing?

Invariably, the reason is “timing” - we have to get this thing to the market now, before somebody else does it! The competition is never as close as you think, and even if they were, it’s about who executes better anyway.

I love bootstrapped companies. The founders are usually much happier and less stressed out, and end up (obviously) with more ownership, which they deserve if they’ve been able to build it this way.

The $20M reference is annual revenue, and you’re right that this is just one measure of success. I have found it to be a good cutoff point for judging companies who are on the national or worldwide stage. It certainly doesn’t mean smaller companies aren’t creating real and valuable meaning in our society, and I didn’t mean to imply that.

]]> By: Dionea http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-457 Dionea Wed, 25 Oct 2006 01:08:17 +0000 http://ColoradoStartups.com/?p=144#comment-457 An advisor once asked me, "how do you define success?". $20M is certainly one measure, but I wouldn't consider a $20M company (be that annual revenue or valuation) that flames out with cash flow problems and a sea of debt to be successful. True success needs to be measured on many axes, some of which include: cash flow positive, profitable, job growth, satisfied customers, long term surviability, and smooth ownership transition. Thanks for the podcast. It's yet another confirmation that bootstrapping is the right way to go! An advisor once asked me, “how do you define success?”. $20M is certainly one measure, but I wouldn’t consider a $20M company (be that annual revenue or valuation) that flames out with cash flow problems and a sea of debt to be successful. True success needs to be measured on many axes, some of which include: cash flow positive, profitable, job growth, satisfied customers, long term surviability, and smooth ownership transition.

Thanks for the podcast. It’s yet another confirmation that bootstrapping is the right way to go!

]]> By: Yong Bakos http://www.coloradostartups.com/2006/10/24/bootstrappers-unite/#comment-441 Yong Bakos Tue, 24 Oct 2006 22:17:23 +0000 http://ColoradoStartups.com/?p=144#comment-441 I like this one, David, thanks for sharing. I know I'm being anally nitpicky here, but I think you're missing the point by your criteria of $20+M. For us creatives who are nearly always broke and hungry, success means a business valuation of far less than $20M, as long as there is sufficient cashflow. Even less a cashflow of less than a $1M, for a one/two person venture is a success in some regard. I would encourage anyone to post their experience about boostrapping efforts, for there lies the real stories. As for our story, I've already summed it up (hungry, broke, creating) I like this one, David, thanks for sharing.

I know I’m being anally nitpicky here, but I think you’re missing the point by your criteria of $20+M.

For us creatives who are nearly always broke and hungry, success means a business valuation of far less than $20M, as long as there is sufficient cashflow.

Even less a cashflow of less than a $1M, for a one/two person venture is a success in some regard. I would encourage anyone to post their experience about boostrapping efforts, for there lies the real stories.

As for our story, I’ve already summed it up (hungry, broke, creating)

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