Wednesday, January 13, 2010

Bootstrapping a Business

"Bootstrapping — the practice of launching a business with personal funds, credit cards, hard work and chutzpah — has long been a catalyst of Silicon Valley's dynamic economy." starts an article by Scott Duke Harris of the San Jose Mercury News. It was carried by the Seattle Times on December 7th and it got me thinking about the nature of entrepreneurship in today's economy.

One of the reasons that comes up frequently when discussing why companies fail is that they did not have enough capital. Often it is the case. But when loans and investment dollars are short on supply and the economy is stagnant at best, there is a requirement to build from the ground up. That is when bootstrapping becomes a more common phenomenon.

You obviously start at a disadvantage and eventually money has to come in from revenue and potentially investors, but the friends-family-self funding stage is where a great deal of groundwork needs to be laid.

Ben Parr of Mashable outlines some of the realities of bootstrapping in his December 8th blog post.

Bootstrapping is the art of building a startup with little to no venture capital. You’re creating your company as leanly, efficiently, and cheaply as possible. Perhaps it’s because you need a viable product before you can obtain investment or because you don’t want to give away 20% of your company to a VC. Regardless, bootstrapping is becoming a more popular option for many entrepreneurs.

Though he mentions that it is becoming a more popular option, the tone does not pull any punches as to the difficulties involved.

However, if you have an interest, join me on the 29th, 30th and 31st of January at Suite133 to discuss bootstrapping, prototyping, business planning and many other tech start up topics. This is an informal event, but it is important to know who can make it and how many may come. You can email me at

If there is enough interest and the weekend goes well, we will likely be able to land a few sponsors for the next go round and may even be able to involve the folks from StartUp Weekend. If you are interested in what kind of companies could possibly launch from three days worth of exploration and prototyping, check out the list of companies that have successfully launched from their events.

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