I have been thinking recently about why my own boot-strapped* start-up keyapt.com has not been as successful as we would like.
The answer lies in the “fail fast” mantra. When you have a start-up it is necessary to try lots of different ideas out on your customers. Some of these fail but if you are smart and lucky you will get traction with one of them. See my blog posts on The Lean Start-up for more on this topic.
We had a great idea – it was so good that we now have lots of well-funded competitors. It is necessary to “fail fast” both to preserve investor’s capital (which does not apply to bootstrapped companies) AND to grab market share before competitors enter the market.
I discounted taking external investment because I could not create a convincing exit strategy (I don’t have any mates working at Google or Facebook who I could persuade to buy my brilliant product for a few billion) but perhaps I should have self-funded three month’s work.
“You jump off a cliff and you assemble an aeroplane on the way down.”
The problem is that if the plane don’t work you hit the ground very hard. This is worrying when you have financial commitments.
So what is the take-away from this post?
A proper risk appraisal of a boot-strapping strategy must include the effect of competition. It also speaks to the nature of entrepreneurs, another author said,
For my part I consider that it is better to be adventurous than cautious, because fortune is a woman, and if you wish to keep her under it is necessary to beat and ill-use her; and it is seen that she allows herself to be mastered by the adventurous rather than by those who go to work more coldly. She is, therefore, always, woman-like, a lover of young men, because they are less cautious, more violent, and with more audacity command her.
* boot-strapped: Self-funded by initial sales or other work such as consultancy