I religiously follow Guy Kawasaki’s blog. He usually has a great perspective on enterpreneurship and business related things. His latest post- “The Art of Bootstrapping” couldnt have come at a better time for us. We are at a point in time, where we have started thinking about these things. Here are some of the bullets from his post:
Focus on cash flow, not profitability. The theory is that profits are the key to survival. If you could pay the bills with theories, this would be fine. The reality is that you pay bills with cash, so focus on cash flow.
Forget the “proven” team. Proven teams are over-rated–especially when most people define proven teams as people who worked for a billion dollar company for the past ten years. These folks are accustomed to a certain lifestyle, and it’s not the bootstrapping lifestyle. Hire young, cheap, and hungry people. Hire what you can afford and make them into great employees.
Focus on function, not form. All the chair has to do is hold your butt. It doesn’t have to look like it belongs in the Museum of Modern Art.
Understaff. Bootstrappers understaff knowing that all hell might break loose. But this would be, as we say in Silicon Valley, a “high quality problem.” Trust me, every venture capitalist fantasizes about an entrepreneur calling up and asking for additional capital because sales are exploding. Also trust me when I tell you that fantasies are fantasies because they seldom happen.