Reboot: Guy Kawasaki on Bootstrapping

Guy Kawasaki has done it all in his career. He's been a Mac evangelist (and later an Apple Fellow), founded or co-founded three startups (ACIUS, Fog City Software, and Alltop), and manages his own early-stage VC fund. If that weren't enough to hang his hat on, he's also a celebrated speaker and author with nine titles to his credit, including the best-selling The Art of the Start. In 2006, he posted this essay on bootstrapping on his blog, which contains some wonderful advice for anyone involved in a startup, including some interesting contrarian ideas on what it takes to be successful.

Reboot: Greg Gianforte on Bootstrapping

Greg Gianforte is a bootstrapper par excellence. He founded and successfully bootstrapped two companies. The first, Brightwork, was eventually sold to McAfee for $10 million. He later bootstrapped his second startup, RightNow, and took it public in 2004. RightNow has become a leading CRM vendor with annual sales of over $50 million. Gianforte's 2005 essay on bootstrapping is an enduring classic and a must read for entrepreneurs.

What's in a Name?

Since launching this blog, I've had friends and acquaintances ask me how I selected the name and what "plan on fire" means, so I'm writing this post to clarify that for anyone who might be curious.

First of all, "plan on fire" is obviously a play on the expression "man on fire," which happens to be the title of a 1981 novel by A.J. Quinnell, although I suspect the phrase may predate his book. Readers may be more familiar with the films based on the novel, one in 1987 and the other in 2004 (with Denzel Washington).

More importantly, "plan on fire" reflects my critical stance towards a myopic view of entrepreneurship often peddled to aspiring business owners. Many academic courses and books on the subject of new venture creation emphasize little beyond writing business plans and raising money, as if these were the skills that will make you into a successful entrepreneur. They won't. They are merely prerequisites necessary to exploit a limited range of opportunities.

Top 9 Reasons Bootstrapping Beats Raising Capital

1. You get to keep all or most of the equity!
2. Spending all your time in pitch mode draws attention away from overseeing the health of your business.
3. Being capital constrained forces you to be more creative, focused, and disciplined. Bootstrappers get more mileage out of every dollar they spend.
4. You'll never be forced out simply because the investors decided one day they needed to bring in a CEO with more "credibility" (read fancier résumé).
5. You don't have to worry about getting diluted or "crammed down" in a future investment round.
6. Bootstrapping forces you to develop a compelling value proposition and a forgiving business model right out of the chute, instead of "Our plan is to spend a lot of money today to attract eyeballs, then figure out how to monetize or sell it down the road."
7. The care and feeding of investors is an ongoing distraction for you and your team.
8. By necessity, bootstrapping puts you out in front of customers almost immediately. The faster your offering is in the hands of customers, the faster you generate revenue and the faster you refine the product specs to really nail the market. This may put you several iterations ahead of the competition that's developing version 1.0 internally using seed capital.
9. Anyone can bootstrap. Your ability to launch is not contingent upon getting approval from someone else.

Here's the bonus: Bootstrapping a startup in no way prevents you from having investors later on, preferably once your business is profitable and growing. If you can eliminate the biggest risks before seeking funding, you'll raise money with less hassle and on better terms.

Get a Web Site and Cloud Computing for $10!

As a bootstrapper, I'm always on the hunt for ways to do more with less. Mashable has a great tutorial showing how any business can create a professional looking online presence with their own domain name for a mere $10 per year using free tools from Google. All you pay is the annual fee for a custom domain name, and you don't need to be an HTML guru to set it up.

Reboot: Seth Godin's Bootstrapper's Bible

Seth Godin's bootstrapping manifesto is once again available for download (and it's free). It's been around awhile, but The Bootstrapper's Bible is such a great introduction to the subject, I wanted to make sure everyone who reads this blog knows about it. I'll post a more thorough review and summary later. In the meantime, go get it. Enjoy!

Why Write About Bootstrapping?

So, I've decided to add my voice to the chorus of online resources on entrepreneurship. Why does the world need one more blog on early-stage companies, and why do I promote bootstrapping over venture-backed startups? I've elected to focus on bootstrapping, because (a) it's the best approach to entrepreneurship I've found, (b) it seldom receives the attention it deserves in the business press and academic literature, and (c) many resources on bootstrapping do not venture much beyond discussions of sole proprietorships.