- Focus: As CEOs, our most precious resource isn’t money; it’s time. And time is a byproduct of focus. When you are bootstrapping, you must have laser-like focus on creating value for your customers, because that’s the only way to get paid. Fundraising is addictive. Once you get a small taste, you need more and more.
Furthermore, fundraising CEOs often spend a ridiculous amount of time preparing to pitch, pitching and improving their pitch. This means that they spend a ridiculous amount of time on things other than making the business better. Bootstrapping gives a level of importance to each decision, allowing CEOs to see what is worth their time, energy and yes, money.
- Purpose: Successful entrepreneurs have a clear vision of their company. With each additional stakeholder comes someone else’s vision, motivations and purpose. After companies go public, the quarterly numbers become more important than long-term strategy.
In startups, vanity metrics only appease capital partners. Potential investors can become king over long-term value generation.
- Iteration: To paraphrase military strategist Helmuth von Moltke, “No business plan survives contact with the customer.”
Raised capital is like jet fuel: Sometimes it can propel you through the atmosphere, but often it results in catastrophic explosions. The more fuel that burns, the faster the rocket goes; the faster the rocket goes, the less margin for error.
Bootstrapped companies are more effective at making constant course corrections, carefully honing the business model to be sharper and sharper, and ultimately constructing a strong foundation for consistent, sustainable growth.