Bootstrapping: It ain’t easy!
It’s a fairly well known fact that I didn’t start MyCorp – though I’ve worked with the company in different roles since its beginning, I bought the company and became its CEO back in 2009 when its then owner, Intuit, chose to divest and go in another direction. The trouble with this timing was twofold. First, I bought the company in 2009, meaning the economy was still suffering in recession. Second, I mortgaged my house to buy the company, so I didn’t exactly have a lot of working capital. I had to keep the company upright until business improved, and I didn’t want to bring on any outside investors, so really the only option was to bootstrap. Thankfully the gamble paid off and the company is doing better than it ever has before, but more importantly the experience taught me a few great lessons.
- Running lean isn’t easy
To be fair, nobody thinks running a business is easy. But a lot of people assume that bootstrapping is easier than taking a business loan, or asking family, friends, and fools for some seed money, since you don’t have to go out and beg for cash. But, honestly, you’re just swapping prison cells. Yes, it’s nice to not have to answer to investors about how you are running things, but you still lose a lot of flexibility. You normally spearhead any sort of expansion or change, so you don’t really have the freedom you might expect. But, if everything works out, that freedom comes back a little more quickly than if you didn’t bootstrap.
- Sacrifice is mandatory
The biggest problem with MyCorp was our size – we were a lumbering behemoth attempting to compete with lean start-ups. So I had to cut our staff. That was a sacrifice that simply had to be made. I worked alongside these people for a long time, and having to let them go was hard. But it taught me that, on this path, you will lose things – friendship, time, staff, a personal life – and sometimes they don’t come back. When you bootstrap, there just aren’t many options. If business was going to pick up, there had to be sacrifice.
- It is both tiring, and inspiring
When I first decided to bootstrap the business and get the company back on track, I knew it was going to be hard. But I didn’t know just how hard. Bootstrapping shows you what you are made of, and what you’re capable of doing. When you are low on capital, you can’t just hire someone else, or let a customer leave unsatisfied. You scrape and scrounge until your accounts turn to the black. And when that happens, you won’t be able to help but step back and marvel at what you’ve done. It’s those moments that really make the experience worthwhile, and keep you going.
- This is my business
Impostor syndrome is a real problem for business owners. It doesn’t matter how much training, experience, or intelligence you have – nearly all of us experience those moments where it feels like we just sort of lucked into our success. That can cause a lot of stress; I know it scared me. While there is no way to completely shut out those worries, bootstrapping does help you internalize what you’ve accomplished. Bootstrapping, after all, requires you to be a lot more hands on and intimate with the inner workings of your company. When you are literally grinding the cogs that make your business run, it’s hard to feel like its success isn’t your own.
Running a business is tough, and choosing to bootstrap instead of finding investors makes it tougher. There will be times where you wish you could just have a bit more money to hire someone new, or to give you a bit of breathing room. But I’m a big proponent of bootstrapping because it makes you appreciate your business, your team, and your success. Those lean times will be rough, but make it through, and you’ll feel unstoppable.