In the startup community, the do-it-yourself (DIY) approach to bootstrapping a business is NOT the most celebrated concept. It is considered inefficient and risk-ridden and, I dare say, not at all sexy.
But myths are made to be debunked. Bootstrapping isn’t always a surefire route to burnout and hitting the deadpool. It can be a path to creating real businesses, small or large, that can support their founders and employees.
Over the last 16 years of bootstrapping and running two profitable businesses, I’ve learned my fair share of lessons. And through my success and failures, I can confidently say that bootstrapping is a viable method. With all the tools and resources out there, the right strategies and sheer persistence, you have a good chance to succeed.
My entrepreneurial journey began back in 2000. I was completing my last semester as a Biology major at the University of Maryland, a couple years after being diagnosed with a debilitating autoimmune illness called Crohn’s Disease, all along clueless about where I was headed with my career.
My friends were getting ready for summer vacation and preparing for graduate school, while I was forced to drop out of college and ended up stuck at home, nearly bedridden. I was on a ridiculously strict diet and several medications. I was months away from achieving remission and getting back to normal life.
It was one of those moments in which I felt I was reaching rock bottom, both personally and career wise. I had two options: do nothing and let time go to waste; or own the situation and put all of my free time to better use.
This is when I received my first lesson as a DIY entrepreneur: Starting a venture doesn’t require a lot of material resources. Your most important asset is unbridled enthusiasm and abundant persistence. I had $170 in my bank account, an old desktop computer with a big fat VGA monitor, and a lot of time. It turned out to be more than enough to start creating something from nothing; a sort of baby step that led me to start the two companies I continue to run today.
While I was low on resources, timing worked in my favor. The turn of the millennium presented unprecedented growth opportunities for the internet. It was the time for businesses to go online. Y2K thankfully didn’t trigger the end of technology as we know it, and, as many have predicted, the netizen population was growing exponentially, and thousands of dotcom startups and billions of dollars were meeting face to face.
My intuition told me it was the right time to start an internet business, and I came up with this idea: Set up coupon pages for businesses so that their customers could print out special offers from the web.
Then came lesson number two: Things won’t go as planned, but don’t overlook the opportunities that come with change.
After a few weeks of rejection, a turning point happened: a local business owner called and asked me to design a website for him. “Sorry, that’s not what I do,” I explained to him. “What I offer is an online coupon page and you pay me a fee to host it online." With an incredulous gasp he said: “Why the heck would I want that? I want my own website! How much would that be?”
That was the third most important lesson I’ve learned: Give your customer what they want, and not what you think they would want. I thought to myself: Why in the world am I selling $99 coupon pages when this business (and probably many others like it) would be happy to pay me more to have their own site?
Today “validating your business model early and often” is widely adopted and recommended by the startup community. Back in the early 2000s, I learned validation the hard way. I wasted a lot of time and resources due to the habit of jumping right into an idea when I saw an ocean of opportunities.
When it comes to actually delivering what my client wanted, I was clueless. I had never took a class on design or worked on a design project. But as a DIY entrepreneur, I had set my mind on creating and learning everything myself, including teaching myself web design. It took me more than 150 hours and countless revisions to deliver a small static five-page website that got me my first hard earned $800. Looking back I had earned below minimum wage. But the important lesson number four I learned here is priceless: As a DIY entrepreneur, you don’t have to learn everything yourself.
The DIY attitude is a double-edged sword. The figuring-out-on-my-own mentality was a little egotistical when I was younger. HindSite Interactive- the web design agency I ended up running - went on to deliver over 350 custom websites over the next 15 years. But I admit: I would have avoided much wasted time and effort if I had sought out for some advice rather than learning it through trial and error.
Eventually, I figured out a process whereby clients would offer input early on to achieve a design that both sides would be happy with. Had I been exposed to the user-centric design process sooner, these wasted efforts would have been avoided.
There is one thing I’m proud to have figured out very early on. Putting in hard work to service your customers is the foundation of a successful business. So here is my lesson number five: take damn good care of your customers, and they will take care of you. Happy customers become your evangelists. They’re the ones who will keep coming back for more and generate new business leads and help you grow organically.
This powerful lesson of customer retention certainly served me well in my second venture into the software-as-a-service (SaaS) business, where the human interaction of client-facing work pretty much disappears, and the user experience of the software product carries the brunt of the weight in customer decision making.
But first, let me walk you through what sparked my transition from a service-based business into a SaaS business. HindSite was delivering interactive websites built on Adobe Flash. This went on for eight years until Apple came out and killed Adobe Flash as the way interactive content was designed.
It took me a year to realise that flash sites were going nowhere after HindSite started taking a hit in business. Then this sixth lesson dawned on me: When a technology wave comes, instead of fighting it, ride with it.
As a DIY entrepreneur, resilience is the ability to quickly adapt to change and not resist it. Change might seem scary when you have to step away from your comfort zone. In my case, a business I’d built from scratch, but it was necessary to evolve.
That’s how Visme came about. It’s a do-it-yourself online tool that is a perfect marriage between key features of Powerpoint and a design tool to allow virtually anyone to create beautiful presentations, infographics, social and web graphics, among other types of visual content.
A user-based cloud software business model is fundamentally different from that of a design consultancy: it’s not based on how many hours you work but how good of a product you develop and how you gain and maintain user interactions.
What’s also changed is how profitability works for this business model. For a consulting business you are profitable as long as clients are happy to pay a fee that’s greater than your labour and operational costs. It’s a straightforward formula.
For SaaS, revenue comes from premium subscriptions. For a premium model, where only a percentage of free users will convert to paying users, the Lifetime Value (LTV) is varied across different user types. So the profitability math here is a lot more complex than a service-based business: There are more variables in this formula.
This is my seventh lesson as a software entrepreneur: Running a SaaS business is like running a marathon. There are milestones but no finish line. Success here is not linear: you will always be optimising all variables of success and investing in R&D to stay ahead of competition.
I also learned that every dollar needs to be spent with a purpose. As a DIY SaaS product owner, the single most important mission for me is to make sure the product is market ready and viable to survive regardless of whether or not venture funding is available. I was lucky enough to be in a position where I could support the development and preparation with a profitable service business for two years before we made our first buck with Visme.
If you ask me if I would choose to bootstrap my businesses if I had a chance to redo everything again, my answer would be a resounding “yes.” I didn’t just want a quick in and out with investor money; my vision was to create an awesome product of long-term reliability our users can depend on for all their visual content needs. It isn’t the most sexy product idea to sell to investors, and requires a slow start and progressive fine tuning.
My eighth lesson is more of a revelation: choosing to bootstrap gives you maximum freedom to make decisions that are best for your users. At Visme, we don’t have to worry about playing up to vanity metrics or paying back early stage investors. As a team, we had the luxury to be single-mindedly focused on improving the tool and the service.
With the right strategies and tools in place, you too can bootstrap your way to profitability. And even if you are doing it the DIY way, be open minded to advice and tips. When you have created something great out of nothing, it is a tremendously rewarding experience.