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No-nonsense perspectives on startup growth

This article was published on May 4, 2021

    The 3 most important lessons I learned as a bootstrapped founder

    This is what you need to keep in mind when building a business out of your own pocket.

    The 3 most important lessons I learned as a bootstrapped founder
    Andrei Petrik
    Story by

    Andrei Petrik

    CEO & Co-Founder, NetHunt CRM

    Andrei is a customer relations expert with vast knowledge about business processes. When he's not churning out code, he's out on the water c Andrei is a customer relations expert with vast knowledge about business processes. When he's not churning out code, he's out on the water catching some fish!

    Let me start with a bold statement. You can build a SaaS company from the ground up, without any outside help.

    And the best thing is, you don’t need luck or privilege to bootstrap. You can achieve it with tons of blood, sweat, and tears — along with valuing every penny and using every resource at your disposal. Then after some trial-and-error, you’ll get there.

    I had an idea, and I made it a reality. Scratch that, I’m making it a reality. I can’t say I’ve made it as a bootstrapped entrepreneur, but I can happily say that I’ve gotten some of the way. I’ve spent some of the blood, sweat, and tears required to make it happen, and I’ve got plenty more to spend — but also some advice to share.

    So here’s what I’ve learned from my bootstrapping journey.

    How it started

    Let’s set the scene to have some proper context. There I was, a 20-something coding know-it-all, working for an enterprise-sized CRM system. My job was to travel around the US and Europe, implementing, training, and picking up big fat invoices from customers.

    Sounds like a sweet gig? That’s because it was. I was blessed to travel, doing something I loved, and something I was good at. I was extremely comfortable but… then I gave it all up. I walked away.

    I always had one question simmering away at the back of my mind, nagging away at me: why?

    Why couldn’t CRM be as simple as a Chrome extension, like Skype, for example, and why was it so expensive for these customers? We were training people in dozens of different processes, but the teams only used one or two of them. Why didn’t the technology bend to fit existing processes rather than processes bending to fit a CRM? Lightbulb.

    Six years later and I want to impart what I’ve learned since then. Specifically, I want to speak to my bootstrapped peers about what I see as more valuable in business than somebody else’s money.

    Good people come before good money

    Above everything, our people are at the heart of our business – our team. Maybe it’s different for you, but I quickly realized that I couldn’t be everything to everybody.

    I had the coding credentials, but I’m far, far away from being a marketing expert. I’m a good communicator, but have I got the steel nerves I need to deal with something negative somebody says about my product? No way. Besides, there’s not enough time in the day for me to do everything.

    That’s why — to borrow some startup jargon — our employees are at NetHunt T-shaped. Now, what’s that supposed to mean?

    It means I look for people who aren’t specialized in just one thing (I-shaped people), nor generalist jacks-of-all-trades (dash-shaped people). The people we hire at NetHunt specialize in their primary role — but can fulfill other tasks as and where we need them.

    We cross-train and educate each other around our specializations, which improves our communication, and provides a better buying experience for our customers. Our T-shaped teams are excellent at adapting to fluctuating demand, which is crucial in the post-2020, post-pandemic business climate.

    There’s also one incredibly important fact every bootstrapped founder needs to know: team size is not equal to success. So you don’t necessarily have to spend more money to improve your team, but you need to make sure your processes are optimized for success.

    I try to solve that by focusing on untethered communication between our teams. We run daily stand-ups to know what others are doing and have one big cross-team meeting to keep each other in the loop. Our teams are aligned under a shared-informational environment, and they have the tools to back up their existing skills.

    So to sum up, if you tell me I need money; I say no. I need people.

    You can’t set out a business simply upon the strength of finance. However, you can set out a company based on the strength of feeling that people generate when they’re devoted and they’ve got the skills to execute an idea.

    As a bootstrapped entrepreneur, it’s essential to have a good nose for the right people to propel your business forward.

    As a small business, you’re at an advantage

    It’s easy to tap out early on; after the honeymoon period is over, and the novelty of ‘living your dream’ and ‘working for yourself’ has worn off.

    When you look at these tech-juggernauts, with their mega-campuses in Silicon Valley and marketing budgets bigger than we can imagine, it’s easy to think: what’s the point? I’ve been there, and I think we’ve all probably been there.

    It might not seem like it at that point, but being a small business has its advantages. For example, it’s much easier to build better relationships with customers when you’re just starting out. We can avoid awful, transactional communication and speak to them like humans and friends.

    We can listen to their feedback, act on it, and close feedback loops quickly. We can prioritize individual customer success, which is the underlying foundation of business success in the SaaS industry.

    Similarly, things are much easier among a small team. Sorry, but I’m going to use the C-word again… communication. That’s what it all comes down to.

    The smaller the team, the clearer the vision is, and the less diluted your final goals become. At NetHunt, we’re close, almost like a family. Everybody knows each other and talks to each other about life when they’re stuck in the elevator together. Problems get solved because we’re honest and constructive with each other.

    Ditch that megalophobic feeling when you look at Apple, Google, or whoever else. As a small, relatively underdeveloped business, we hold an advantage ourselves. Sure we don’t have the financial backing that these guys do, but we’ve got the flexibility they can’t afford.

    Change things up while you still can: pricing, product UI, and branding. Experiment. Don’t be afraid of your churn rate rising, but believe that your service brings value to customers and their work.

    Your niche is the most valuable thing you own

    Competition is good because it means that a market exists for your product. We use competition to push us closer towards the boundaries of what we can do; we use our competitors as inspiration for what to do next.

    As a small business, it’s your job to find sanctuary amongst all that competition, a place within the competition where there is no competition. The eye of the storm is your niche.

    But being a smaller player, you must choose your battles wisely. Pick a few marketing and acquisition channels, scaling them as your business grows. Otherwise, you’re everywhere but spread so thinly that you’re nowhere.

    As a cost-effective and relevant method of lead generation and education, at first, my team and I decided to focus on content marketing and its inbound and outbound distribution. Every piece of content we put out brings us closer to our niche.

    Specifically, we care about SEO and our Google rankings. Users who find us through these channels tend to maintain a high buying intent; they already know what they want a need. It’s a long game, but we’re playing an even longer one at the moment as we try to conquer YouTube and video marketing. In every video, we try something different; a shorter intro or a CTA in another place, and in every video, we learn something new that helps us.

    Keep an eye on the prevalent trends in your industry; know which marketing and acquisition channels work. Sure, your larger peers have got the budgets to attack those trends, but they also run on massive, often rigid systems with a lot of red tape. If you attack it early enough, you can settle into that niche before they manage to find it.

    What next?

    That’s anyone’s guess. Personally, I’m hungrier than ever after six years of building my own company. I’ll continue to iterate my growth strategies, looking for that key growth factor. I’ll never stop looking for that perfect product-market fit, and I know my team won’t either. Business never sleeps; it continuously evolves.

    Trends come and go; audience preferences change, and our product must keep moving with the times. With my team behind me, I know that anything is possible for the next six years as long as we continue to follow the same formula towards success:

    Hypothesize, implement, measure, conclude

    It’s more than possible to build a SaaS company from the ground up, with no outside help, and ‘bootstrapped.’ Good luck!