Bootstrapping is a set of techniques and tools to boost companies launched in the market with few resources and little financing capacity. Although it is a model closely related to Internet businesses, it is also applicable to face-to-face companies.
Bootstrapping is a term that refers to the ability to launch a business with as few resources as possible. It comes from English and would include activities that start with little or no investment. It is often associated with professionals who can start doing work and billing with a computer and the Internet.
What is Bootstrapping?
Bootstrapping is one of the strategies to consider when starting a new business with few resources. It is a set of actions and operating models based on self-sufficiency and having few resources to start-up and develop the company.
Although it can have different readings and application formulas, the central axis of Bootstrapping is based on increasing the flow of income. That is achieved through customer acquisition, taking advantage of existing resources, and optimizing them to the maximum without resorting to investment.
How to implement Bootstrapping?
There is no single formula for implementation since one of the keys lies in flexibility. However, Guy Kawasaki’s 11 points are often considered a fundamental part of how bootstrapping works.
The 11 points of this technology and marketing guru are as follows:
- Eliminate intermediaries: reduce the number of intermediaries between the customer and the product. In its maximum application, it will seek to involve the customer by identifying himself with the product.
- Confront the competition: as a model of opposition, making the product compete directly in marketing against market leaders.
- Training: through continuous learning. Must compensate for the Lack of resources as much as possible with the knowledge that allows for improving the strategies.
- Cash flow rather than profitability: aiming to maximize cash flow by establishing fast sales cycles.
- Betting on discovering talent: hiring or collaborating with young profiles with talent potential to minimize costs and maximize projection.
- Start the project on a service basis rather than on the manufacturing structure that supports higher levels of fixed costs.
- Reverse forecasting using volume potential.
- Implement the service or product when it is operational, but without waiting for the moment of excellence, carrying out improvement processes based on proven experiences.
- Simplify the offer of the product or service, seeking that it fulfills the assigned function most effectively, but at the same time simpler and with greater savings of means.
- Select and adjust the human resources necessary for the project’s development.
- To choose the work areas and not generate duplications or excess of open fronts.
What is Bootstrapping for?
Bootstrapping has also been transferred to the world of in-person businesses closely related to Internet marketing and sales businesses. It provides the possibility of competing with fewer resources than the competition.
The aim is to create a business model in which the first steps are oriented towards the customer and interaction, cost reduction, and the possibility of generating environments for the company’s growth.
However, it is not all advantages. First, it must consider that in many cases, these models are considered excessively aggressive by the end-user. If campaigns directly related to the customer are carried out, must take great care in the aggressiveness with which they are communicated.
On the other hand, it is a pre-marketing model that does not allow for very clear projections of potential revenues. Unlike other models based directly on production/commercialization, in this case, there is an important component of speculation. That is why it is not considered very appropriate when the aim is to have a clear picture of your company’s future accounts.
Last but not least, it is not so easy to implement. It requires a good number of added elements ranging from basic marketing knowledge to advanced marketing, neural communication techniques, and a good milestone of both online and face-to-face resources.