Bootstrapping- a self-sustaining process that proceeds without external help.
MBA schools always talk about 'using the least to generate the most' in their entrepreneurship classes. The idea is noble - why should you waste time trying to raise capital when you can find quick and easy 'jugaad' ways of creating a Proof of Concept or Minimum Viable Product?
But the problem with this mentality is that one can only grow up to a certain extent with bootstrapping. Remember, when you are seeking 'help' - it need not be only in capital, but also in knowhow, expertise, markets and experience.
Family businesses suffer from this to quite some extent. The owner driven enterprises are often run with very few decision makers, and because the founder's time is fully taken up in trivial issues, growth is arrested.
The following few scenarios are when you should really think about taking the 'risk' and seeking external help
1. The minimum viable product is ready and you have a few customers: Remember, both are necessary. You shouldn't start seeking help when your product is still in the drawing board stage. Because then you wouldn't be building it in the most efficient way. At the same time, you cannot create something without having it validated by a few paying customers.
2. Your blue ocean is suddenly getting red: If you are enjoying a monopoly in the market, and suddenly there is a threat of a competitive force, time has come to build a war chest of funds, talent and ideas and either drive out the competition or dominate it.
3. You need to team up to create something beautiful - If your product, or service depends on more factors, you need to acquire/merge/buy/JV with them and ensure the entire package is air tight. Collaboration is key. Taxi for sure, a Bangalore based taxi operating service, has managed to not only build a beautiful mobile website/app (product), but also managed to collaborate with operators, equipment companies and a solid marketing base.
It is cool to say 'I own a start-up', but when you have to tell that to someone, (without that someone knowing it from before) clearly your startup isn't there yet!
MBA schools always talk about 'using the least to generate the most' in their entrepreneurship classes. The idea is noble - why should you waste time trying to raise capital when you can find quick and easy 'jugaad' ways of creating a Proof of Concept or Minimum Viable Product?
But the problem with this mentality is that one can only grow up to a certain extent with bootstrapping. Remember, when you are seeking 'help' - it need not be only in capital, but also in knowhow, expertise, markets and experience.
Family businesses suffer from this to quite some extent. The owner driven enterprises are often run with very few decision makers, and because the founder's time is fully taken up in trivial issues, growth is arrested.
The following few scenarios are when you should really think about taking the 'risk' and seeking external help
1. The minimum viable product is ready and you have a few customers: Remember, both are necessary. You shouldn't start seeking help when your product is still in the drawing board stage. Because then you wouldn't be building it in the most efficient way. At the same time, you cannot create something without having it validated by a few paying customers.
2. Your blue ocean is suddenly getting red: If you are enjoying a monopoly in the market, and suddenly there is a threat of a competitive force, time has come to build a war chest of funds, talent and ideas and either drive out the competition or dominate it.
3. You need to team up to create something beautiful - If your product, or service depends on more factors, you need to acquire/merge/buy/JV with them and ensure the entire package is air tight. Collaboration is key. Taxi for sure, a Bangalore based taxi operating service, has managed to not only build a beautiful mobile website/app (product), but also managed to collaborate with operators, equipment companies and a solid marketing base.
It is cool to say 'I own a start-up', but when you have to tell that to someone, (without that someone knowing it from before) clearly your startup isn't there yet!
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