So many startups are transfixed on raising money as soon as possible. I can understand why. But there’s another part of me that will always maintain that being bootstrapped, at least in the early days, allows you to learn and establish lessons that will serve you well for many years to come.
Some of the best advice I can offer to founders and startups is that you make better decisions when you have less money. It’s an idea that’s as true in life as it is in business. Learn to function with less, learn to make what you have work harder and go further. Worrying about costs and budgets is a positive thing.
Having less money will teach you more about your business and yourself.
The right idea will sell
When I started Talent Works, it was borne out of frustration with the lack of innovation in the recruitment industry. The inefficiencies of traditional recruitment and agility in talent acquisition demanded something new – there was a clear gap in the market for what we offer our customers today. What I’d say to bootstrapped founders is – the right idea will sell.
Ask yourself what isn’t working in your industry, and how can you look to solve it? Is there an obvious need for your product or service? If the answer is yes, then you’re already on a better track than an entrepreneur who has heaps in the bank, but with an idea that lacks a market fit.
Remembering that is crucial in the early days. Plus, a solid business plan is what is going to cut through the noise when securing funding for the long run.
Startups should focus on people and culture first
One of the top priorities as a bootstrapped startup is to invest in the right people the first time around. Recruitment is an expensive task and getting someone onboard – especially early on – who is not a right fit, or doesn’t stick around, is only going to add unnecessary cost. This is where quality, not quantity, is critical. After all, people buy from people, so focusing on top quality candidates as opposed to simply increasing headcount will lead to better startup success in the long run.
Another thing to focus on is culture, and this doesn’t cost anything at all. Organisational culture is not a buzz phrase – it’s a crucial element within the organisational design and an imperative for future relevance and competitiveness.
When businesses are fixated on profits alone, it is difficult to see where culture adds value. Yet when you’re launching a new startup, the answer always lies with people. We’ve witnessed first-hand in the last couple of years that businesses that put their people first were the ones who triumphed in the face of adversity. A positive, inclusive and transparent company culture should therefore be created from the offset – and this is something which cannot be bought.
Forget expensive overheads
One of the greatest things about the pandemic is that it has completely shifted how we work. Businesses simply don’t need to spend cash on flashy offices or trips abroad. As great as these things are, they aren’t going to add real value to your business.
Working from home – or anywhere for that matter – is on the rise and this brings huge benefits for bootstrapped founders.
According to this report from Pew Research Centre, 61% of people surveyed say they are choosing not to go into their workplace. We have a bigger opportunity than ever to tap into a global talent pool.
Passion is all
In my experience, I’ve seen businesses that focus on the money they can make and the exit plan from the outset, only to see their business idea fall apart. If you focus on fixing the issue at hand and have a vision and a north star for your team (and reward them, of course) you’ll find investment and success follows you.
The road ahead is less certain; we have a war in Europe for the first time in over seventy years, there are record numbers of people fleeing humanitarian crises, cyberattacks are on the rise, supply chains are in crisis and we are facing high inflation.
As business leaders the less risk we can take, and the stronger the ideas we have, the better. In particular, the best people we have along for the journey is what will give us the resilience to grow.
There are so many things a founder needs that money simply cannot buy.
Neil Purcell is the CEO and founder of Talent Works, a recruitment company.