When you’re paying for every expense out of your own pocket, you need a different approach than a startup with a generous round. But what you lack in cash you make up for in freedom. With no investors or board to please, you can move fast—and spend only where you see the most value.
Define Your Market
As an early stage bootstrapped company, you’re likely still figuring out your path. That’s ok. Your goals now should center around creating a proof of concept and MVP so you can set yourself up for growth and funding when you’re ready. Some things you should figure out asap, while others you can decide on later.
At minimum, you’ll need a core product and a target audience so you can start getting those first few customers on board. Here’s what to focus on first:
- 1-3 loosely defined ideal customer profiles that sketch out the company size, needs, and job role of the people you expect to want to buy from you.
- What category you’ll be in and how you plan to position yourself against competition. A best guess is enough—as soon as you have enough traffic and engagement to test messaging, you’ll be able to refine your messaging based on real analytics.
- What capabilities you have now and which you plan to add soon (like next quarter).
Allocate Your Budget Wisely
In the beginning, unless you have an insanely clever consumer product and a bit of luck going viral, you’ll have to rely on your salesmanship to bring in your first few deals. Business development can work almost right away, while most other tactics—like content marketing, advertising, social, or PR take months to generate a meaningful amount of leads.
This means most of your sales and marketing spend should be allocated towards frontline items like your website, sales collateral, and product demos at first. Once you have an acceptable baseline you can start spending more on longer-term strategies. Here’s an example of a possible breakdown in your company’s early days:
- 40% on website production
- 30% on sales material like first call decks or outbound emails
- 20% on strategic planning and messaging
- 10% on starting a blog or other content
A great way to prioritize spend early on is to think about what’s stopping you from finding opportunities and closing deals. Are you embarrassed by your website? Is your messaging vague or confusing? Are you winging it in sales meetings? Find your weaknesses and tackle them first.
Make the Tough Decisions
Part of the fun of starting up is deciding how to build your company, and it can seem like there’s always another path to entertain. But there’s a difference between being flexible and flat-out indecisive, so here are a few ways to curb the indecision and move forward confidently:
- Find a core direction and add layers of flexibility around it by adjusting the user experience, pricing, and messaging. Despite the ever-popular “pivot” in startups, you’ll set yourself back if you’re constantly rethinking the basic purpose of your product—and in software, you’ll also be driving your engineers crazy. Try to choose the “what” and feel free to change the “how”.
- Don’t overcommit to expensive software, PR, or ad spend until you’ve gone through a couple iterations of marketing strategy and messaging.
- Pull the trigger on key items. When you’re juggling everything from devops to Facebook posts, it’s easy to hold off on big ticket items that require crucial decisions to be made—especially when those decisions require signing large checks. Remember that moving fast is one of your strengths and keep the ball rolling on your most important tactics.
Track Your Data from Day 1
You won’t be able to take any real action based on your data until you hit statistically significant numbers, but you need to start tracking it from the very beginning. If your strengths lie outside of analytics, spend at least enough to get event and goal tracking set up in Google Analytics.
Find Your Selling Sweet Spot
Talk to your customers, your lost opportunities, and your internal team until you understand what clicks and what falls flat. When you start to see traction in your sales, jump on it.
Consider making the leap to hire a sales VP or manager once you find success—the investment will pay for itself as long as there’s room for growth in the market. If you find your reseller channels are performing particularly well, you might want to hire a partner manager and build out incentives and training there instead.
Bootstrapping usually means having less money and therefore being careful with it. Knowing when and where to spend and avoiding budgetary black holes can get you to market faster and keep you competitive once you're there.