I believe that Bootstrapped startups are harder to build than the funded ones. I think it is because the founders of Bootstrapped startups have to do everything from scratch.
They don’t have the luxury of relying on a big company’s resources or a large investment from a VC firm.
So how does it feel like being one?
It feels like having your feet firmly planted on the ground. There is no room for anything less than perfect execution and focus. You need to be 100% sure about what you are doing before you take any action.
There is no room for trial and error, you will learn it either way but you might end up burning your savings if you are too liberal with your actions and make mistakes which cannot be rectified easily.
When we started Cudy Technologies, we had very little savings in our bank account, so we had to be careful about how we spend our money. The biggest problem was that most of our potential customers did not know about us, so it was hard to get traction.
So in order to survive, we had to make sure that we did not waste money on marketing. We had to be extremely disciplined and focused on our work.
But what is the best part about Bootstrapped startups?
It is the freedom. You are free to do whatever you want, you don’t have to answer to anyone and you can focus on doing things your way.
But with great power comes great responsibility. You are in charge of everything and there is no one else to blame if things go wrong.
What are the challenges?
The biggest challenge is funding, but if you don’t have money it doesn’t mean that you cannot build a successful startup. Bootstrapped startups have an advantage of not having to worry about VC funding and can focus on building a business.
The challenges are not limited to just funding. The biggest challenge is finding the right people who will work with you.
There are many developers out there who are not as passionate about what they do as you are. This can be a big problem because most of the time, the development of your product depends on how much passion your developers have for what they do.
You need to find people who love coding and want to be a part of something great that you are building. Finding these people is not easy but it is very important because if you don’t, you will have to hire a lot of developers which will increase your costs and time-to-market.
But then again, Bootstrapped startups also have an advantage over funded startups because they don’t have to worry about making profits or filling up their investors’ pockets with cash.
They can build their product for their customers without having to worry about how much money they are making or how much money they need to make in order to raise more funds from investors.
In my opinion, Bootstrapped startups build better products than funded startups because their founders only focus on building the best product they can and don’t have to worry about anything else.
What are the upsides?
The upsides of being a Bootstrapped startup founder are many. The biggest upside is that you get to build something from scratch, without having to worry about other people’s opinions or what they think about your product.
You get to build it the way you want and with a very small team, you can achieve more than most funded startups. But with great power comes great responsibility, and in this case, the responsibility is on you to make sure that your startup does not fail.
What are the downsides?
The biggest downside is funding. It is very hard for Bootstrapped startups to raise funds from investors because most investors do not like investing in unproven companies.
They want companies which have already proven their potential so that they can invest in them with ease and make profits in the future. This can be frustrating because you cannot blame them for doing so but at the same time, if there were no investors then there would be no funded startups. So either way, someone will have to take the hit.
So what do you think?
Are Bootstrapped startups better than funded startups? I believe that it is a matter of opinion and I have given my opinion on the matter.
I have also talked about the upsides and downsides of being a Bootstrapped startup founder. So if you are thinking about starting a startup, you should definitely consider bootstrapping because it will give you the freedom to do whatever you want without having to worry about investors or funding.
But at the same time, there are many risks involved and you need to be very careful about how you execute your ideas and plan.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.