Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business – Arvid Kahl Book Summary

Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business – Arvid Kahl | Free Book Summary

Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business – Arvid Kahl

Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business is a book written by Arvid Kahl in 2020. It is a step-by-step guide to starting, running, and selling a bootstrapped business. It covers topics such as developing an idea, creating a product, finding customers, hiring employees, raising capital, and exiting a business. 

It provides advice on the key elements of an effective business, such as goal setting, customer service, financial planning, and marketing.

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The book offers actionable advice on how to use technology to create a successful business, the importance of customer-centricity and continuous iteration and improvement.

Your Initial Pricing Will Never Be Right, But Try Anyway

At the beginning of your business, revenue serves one purpose before any other: validation. A paying customer is validating multiple things at the same time: they are saying that your product is good enough to solve their problem, they are saying that it provides more value than it costs. They are saying that their problem is painful enough to pay for a solution. With that one payment, they validate the product, value, and problem.

That’s why the price is only secondary. As long as it is not higher than the value of the product, it will be fine. There are two rules to early pricing: it’s never perfect, and it can be changed. So get used to thinking that your price is a very fluid number with a lot of flexibility. It is not set in stone.Free book, podcast summaries

Underpricing or Overpricing?

Significantly underpricing your product will create a few problems down the road.

While it will likely get you a lot of customers initially, many of them will be very price-sensitive. Once you raise prices later, even a little, those customers might be very vocal about their disappointment. While there are ways to deal with that, like time-limited subscription grandfathering, you’ll be limiting yourself.

Overpricing your product, on the other hand, is not as bad.

You’re communicating that you think your product is worth it, you indicate that it is a professional tool, something for experts, for the people who know what they are doing. With a high-price product, you only need a fraction of the number of customers to become sustainable. And you can always lower your prices if customers disagree with your value proposition.

Mental Health: It’s Not Optional

You will need to take care of your mental health, first and foremost. Running a company is hard. Running a bootstrapped company is particularly hard. Unlike a company with funding, every decision you make has an impact on the immediate survival of your business.

That can take a toll if you’re not prepared. Learning about how to deal with perfectionism, impostor syndrome, and similar psychological hurdles will make you resilient to self-sabotage.

Understanding that your work as an entrepreneur might also lead to social headaches will allow you to prepare for uncomfortable situations and conversations, and to focus on what matters most: building a life-changing bootstrapped business.

Product Evolution: Controlled Growth and Saying No

Once you have started selling a product, you’ll want to make sure it gets better and better at serving your customers. In theory, that means inventing new features and improving upon the old. In reality, founders that don’t spend a lot of focus on controlling the growth of their product turn it from a slim and focused offer into a bloated monster. Saying “no” to feature requests becomes a necessary skill to learn.

In addition to making sure only the features that genuinely provide more value to the customers make it into the product, you’ll also need to make sure to build them in a way that allows you to change or remove them when needed. What is required today may be obsolete or harmful tomorrow.

Maintaining the product with that thought in mind requires doing things a certain way.

How to Do Maximum Customer Service with Minimum Effort

The beautiful thing about SaaS products is that they are so scalable: every customer gets the same product, with little to no customizations. That makes Customer Service straightforward as well, as customers are likely going to have the same problems.

There are a few methods that will let you help many of your customers at the same time.

Synchronous tools such as chat widgets will allow you to be there when people are experiencing real problems that they can’t solve themselves.

Asynchronous tools such as automatic responses and resolution chatbots will help those customers who just need a nudge. Finally, self-help tools like knowledge bases will allow you to distill your 1-on-1 conversations and problem resolutions into articles that can be read and followed by every future customer that runs into trouble.

Using a system like Intercom that interweaves all of these kinds of tools will increase your efficiency: you help a customer, then write the article, and the next time anyone asks, they get a suggestion to read it. Answer once, help a thousand times.

Pricing: Subscriptions, Plans, And Other Money Troubles

The great thing about revenue is that there are many levers that you can move to improve it. The not-so-great thing about revenue in a bootstrapped business is that it’s hard not to move the wrong levers.

Adding more expensive plans might alienate your customers, increasing your prices might upset those who have been with you for a long time.

Some strategies may work well at the beginning of your business, but prove to be fatal further down the road. In the Survival Stage, there is a high chance you’ll settle with non-optimal pricing plans because the ones you have worked well enough. In this section, you’ll find many strategies that will help you find the plans and prices that work best.

Make It Sell Itself: On Referral Systems

Referral systems are meant to support your marketing with an incentivized method of getting new users to try out your product.

In a world of affiliate marketing, referral systems are sometimes perceived as a cheap marketing trick, so you will have to be careful to provide a clear value proposition to the referrer and the referred.

It helps if the audience you’re selling to understands referrals to be something positive. Some communities are more open to exchanging recommendations than others.

Referral systems are best leveraged in communities that trust the recommendations made by outstanding members of their communities.

In a market where there is a lot of cutthroat competition, referrals are not quickly given, lessening the potential virality of a referral system. In communities of frequent and well-intentioned exchange, like among teachers, a referral system will be adopted quickly.

How to Sell as a Bootstrapper: Strategies That Work

Sales work differently for bootstrapped founders.

You don’t have time or the resources to sell them what they want. You will need to sell them what they will buy. Big companies with huge R&D budgets can afford to sell their prospective customers a vision and then turn that into reality.

As a bootstrapper, you will need to sell what you already have. Don’t promise the world to customers just to get their money: with limited resources, you run the risk of overcommitting.

Many small businesses have been derailed by selling to just a few big customers, only to turn into their personal custom development shops. If you value your independence, go after a large number of smaller customers instead of just a few big ones.

The Stability Stage

There will be a point when your business starts humming along. You have built a product that works well for your customers. You’ve found a pricing model that generates sufficient revenue to pay for the business.

Maybe you’ve committed to the business full-time, and you can already pay yourself a salary.

The important part is that you’ve built a business that has survived long enough to establish repeatable processes around your product and your business. Now is the time to double down on those and optimize them for scaling. You will need to develop methods and approaches that can deal with much larger numbers of interactions and transactions at this stage.

In this stage, you will work on automating the internal processes of the business and on streamlining these operations into resilient and transferable processes.

You’ll focus on having a well-positioned company that looks good to potential partners and has opportunities for sustainable growth. You will be building long-term relationships with customers and turning the business into a brand with a tribe.

Building a Brand

With a growing business comes growing awareness. The more people know about your product, the more they will talk to their peers, increasing your reach, and recruiting new customers.

To benefit from that, you will need to create a brand around your product and business: you need to have a compelling story, ready to be shared by an engaged and passionate audience.

You will need to start selling more than just a service at this point. Once you start partnerships with other businesses and reach out into a less eager segment of your market, your messaging moves from providing problem-solving functionality towards creating superior value and helping customers reach their goals.

But what do you say, and how do you spread the word? A brand takes care of the what, and a tribe will take care of the how.

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