[Notes from NextBigWhat : Bootstrapping is extremely under rated. We invite bootstrapped startup founders to share their experience.]
This is Raxit, founder @ SmartMumbaikar.com, which runs carpool in Mumbai. Strong believer of bootstrapping since last 4 years – sharing some of my learnings bootstrapping over the last few years.
1. Try to validate idea asap & achieve product market fit. (For product startup)
Either you directly jump start after college, during college or after few years in Job, this is the most important aspect.
I have done job for 7 years before quitting and I was having cash of approx. 15 months. Idea was to enable people sharing their vehicles. After quitting it took me approx. 11 months to build technology and make site up for usage.
Our idea is simple : we enable you to share car/give/take lift, you save on money, you pay us Rs 400/month.
Idea Validation: After 11 month we were seeing slow traction, people were paying or asking for trial. So that was a validation of what we are trying to solve, people want it and ready to pay for it…. But Scary..
Solution: Let me admit, How foolish I was. I was (and still i am ) geek, so we have build system like this. User sign-up with his/her mobile number, home and office location. Instead of pressing button in Uber, you just give a missed call on our number. Same way uber finds you nearby cab, we sms you who all are going on your route. This solution never ever worked. I tried to do a/b test, marketing, advertising but no luck. I lost all my money, I was not even having money to pay for my rent, maid. Those scary days, true friends and roommate were helpful.
I had to tell tata bye-bye to employees without giving them salary (I cleared all dues later and still have a very good relationship with all).
Now within 2 yrs we are doing 2.5 lac seats sharing using carpool every month, It is growing! We are making decent revenue & profit. Also launching android & iphone app soon.
PS: June 2016: Uber was doing Pool ride of 2 lac/month, even you book using UberPool and go solo, they count that as UberPool vs We are counting actual seats.
It tooks 18 months time to realize things are not working, a bit longer time.
2. Never do growth hacking before product market fit – At Least don’t spend heavy or even less. (Applies to funded/ bootstrapped startup both)
- Angel/VC funded founders have this itch on doing big marketing, SMS, Email, Hoarding, Radio-TV Ads etc. even before product market fit
- Normally Angel want exit in 4-6 yrs, VC 7-8 yrs. So Angel wants you to get next round asap. To get to Series A you need to have good traction
- For VC funda is simple, invest in 10, 7 will die, 2 will survive, 1 will pay for all 7 who failed, that is their business. But for you as founder, your startup is your baby. If you spend cash and not have loyal userbase, it is like leaky bucket.
Your top priority should not be growth hack but it should be retention hack, unit economy hack and profitability hack.
For standalone product, it may not be difficult but for Network effect / Marketplace app, this is really challenging and thin chance of success if not done with discipline
3. Ask for Help! Especially top shot.
When things were not working, I was trying to close sales of our solutions to larger enterprise (without realizing product/solution is wrong). There are very good people in Industry like Few VC,Ex-colleagues. Even we were competing with one of his portfolio companies, one VC never hesitated introducing me to Top CEO level people whenever I asked him. Surely, I was able to complete sales quicker, but sold them wrong (Product who has not achieved product market fit)
Same way, asked friends for survival money, credit cards etc… few have supported, Few went silent. In bad time, you will find who is your true friend and who is just so called “Bol bachan”
4. Build product that people love.
Shitty products go nowhere.
5. Make few users obsessed (truly/madly/deeply) with your product versus 10,000 Facebook likes
Test : When they are unable to use your product, it should create itch/frustration to your users.
6. Spend time & money on right thing
- Don’t buy/rent office if not needed, work from home, or separate flat.
- No shiny furniture etc, minimum need is enough
- Use CCD/Barista/Customer office for meetings
- Pay your employees well & on time, give them stock options.
- Spend your time with Employees and Customer (my 90% time goes here)
- Stay Lean
- Do parties 🙂 Have fun.?
- Provide great customer experience and support
- Listen to Yourself, your employee and your customer.
- Don’t listen to anyone else except other entrepreneurs & above
- Prepare yourself and your near dear one for your hectic work, there will be no work life balance during early days.
- Don’t fall in love <3 Else it will more likely to hurt everyone. Be ruthless.
- Hectic days are good, Redbull is your friend,
- Bad days will be there, Beer is your friend.
- Normal days, have enough tea/coffee/juice/nimbu pani
- Don’t forget to put Analytics.
- Prepare mentally, there will be good day as well as bad. Don’t give up in bad time.
- If you are trying to solve real problem, if first solution does not work, Try changing solution (in our case missed call to share car, to Use app to share car)
- It will take 2-4 pivot before you reach product market fit.If you can build things in 3-4 months and validate still it will suck your 6 month to 1 year. Be mentally prepared & don’t give up. Most of the founders give up after 1st pivot
- Don’t try to raise money without traction, except in hot area it will suck your time and energy without any fruitful result(Like right now AI, hardware, VR/AR etc)
- Don’t innovate on many aspect at a time, focus only 2-3. Rest follow the tradition
- Doing PR is not equal to Doing Dhandha, press can give you spike for short term.
- Don’t Hire PR agency, build relationship.
- Focus on crucial 2-3 matrix, Ignore matrix which are useless
- Bad/Angry customers gives you good lesson.
- Instead focus on in order 1) validation 2) product market fit 3) traction 4) funding (optional) 5) growth.
Tip to Non-Tech founders
- Learning coding will definitely help your company
- Outsourcing is an easy option, Still don’t do it. You will likely to regret.
- Learning coding will not take more than 2-3 weeks
- Building team vs outsource, building team is difficult but still do it.
If you are tech founders, try Sales.
Hiring & Firing
- Fire fast if need to.
- Non-performance or no chemistry match within team, just be ruthless.
- Be open for learning, listening.
- 10% idea discussion rest all execution, At one small startup, full day only idea discussion only, Less coding, Less execution and in few months all went for job.
- Don’t rush for hiring, hiring wrong people in early days may put a big risk on your startup.
- Early days hire generalist, Growth stage hire specialist.
- Hiring your ex-colleague or prior work experience is good.
- Unknown hire, do chaos test. Put him/her in weird condition and see how one reacts additional to their required skill.
- Hire UI/UX at early stage (I have done mistake to hire UI/ UX after product is ready, regretting and paying for it now).