5 Benefits to Bootstrapping Your Start-Up
By Ben Conard: On lean startups and the lessons he's learned despite the challenges.
As a college student starting a company, I didn’t have the luxury of deep pockets, a network of investors, or even the know-how on or credibility for raising money. While I was indeed cornered into operating on a very lean model, looking back, I am grateful for that.
Lean start-up is hard. Your grand ideas enter the market more slowly, you can’t invest in business-building assets like industry-standard software or machinery, and you certainly can’t pay yourself (which means long hours, no salary, and no guaranteed future payout – can someone say ‘burnout’?). And, heck, there are only so many years you can live in your childhood bedroom! (Grateful for that, too – thanks, mom + dad!)
Despite these challenges, I have learned to love the lean model for it has taught me invaluable lessons in both business and life. Here are my top five:
1) Exercise Your Creativity
Don’t have the cash to hire a package designer? Can’t pay a salesperson? Don’t know the first thing about trademarks, food packaging requirements, or building a website? Ask your network, make Google your best friend, and give it your best shot. Get creative and give your right brain a run for its money and you might just surprise yourself.
2) Prioritize Revenue-Driving Activities
With investment, you’re given a certain level of freedom, which could lead to conflicting distractions. How do you know where to focus your limited time? On marketing? Product design? Testing? Planning? Lean start-up makes this very easy. You must be disciplined to focus on what will drive results that bring in revenue to keep the business alive.
3) Decrease Risk
This one’s easy. You can’t lose $500,000 of your or someone else’s money if you don’t have it! Instead of constructing a complex supply chain for our first few batches, we tested our samples with ingredients off the shelf. Instead of building a chocolate factory from scratch, we rented a commercial kitchen by the hour. Taking steps 1 and 2 don’t require a lot of cash – get out there and test!
4) Pivot Quickly
Did you know that Five North Chocolate started as a candy company? Most people don’t because we didn’t invest in a fancy website, gorgeous package, or even a trademarked name until we were confident in the product our (potential) customers wanted. Instead, we spent a few weeks cooking up samples of hard candies and lollipops created in my dorm room kitchen. After sharing these samples with strangers, we quickly learned that nobody wanted our sugary lollipops (never mind pay for them). Since we didn’t invest in building a candy company, we could quickly pivot to a different product offering… chocolate!
5) A Lesson in ‘Less is More’
Less truly is more. With fewer gadgets and tools, you learn to be resourceful. With less on-hand talent, you learn to wear more hats and sharpen more skills. Simply put, with fewer resources at your disposal, you learn how to find the ones that truly create value. While some business ideas do require significant investment at an early stage, many ideas can be executed quickly with less risk using a lean model. Let me know your favorite or least favorite traits on using a lean start-up model in the comments!
Ben Conard is the founder of Five North Chocolate®, an award-winning certified LGBT Business Enterprise® and 2016 Clinton Global Initiative University Commitment to Action creating healthy Fair Trade Certified™ snacks, empowering farmers, and celebrating diversity.