Reaching Escape Velocity as a Bootstrapper

Escape Velocity

This article was a guest post by Bronson Taylor who is the host and co-founder of Growth Hacker TV, where the experts on startup growth reveal their secrets.

Escape velocity, in physics, is basically the speed needed to break free from gravity. The idea of escape velocity also surfaces in regard to startups; David Cummings says that, “For startups, escape velocity has to do with becoming the dominant vendor and growing indefinitely.”

I agree with David, if we are referring to VC backed startups, but bootstrappers have a very different notion of escape velocity. After almost 100 interviews on Growth Hacker TV, I have come to realize that a self-funded startup is not trying to reach a 10x return on a multi-million dollar investment.

Escape velocity for a bootstrapper might be freedom from the monthly bills, or freedom from a full-time job outside of their startup. Bootstrappers don’t need to escape from competition and become the “dominant vendor.” They require much less velocity because they are escaping a different kind of gravity.

This is an extremely important distinction because most of the growth advice online makes the assumption that everyone has venture capital. However, if you are self-funding your startup, here are four rules for reaching escape velocity as a bootstrapper:

  1. Linear can be celebrated

    VC companies need hockey stick growth. They need an inflection point where growth becomes exponential (or as close to it as possible) so that they can become the clear winner in their market. Linear growth, or heaven forbid, sporadic-up-and-down-non-uniform growth, is heavily frowned upon. Well, not when you’re a bootstrapper. Let’s say you have a bootstrapped SaaS product and you get 20 new customers in January, 10 in February, and 15 in March. Who cares? You now have 45 customers paying you every month. Does it really matter that the growth curve wasn’t beautiful enough to be displayed in the Museum of Modern Art? Ugly growth, as long as you are growing, can be celebrated as a bootstrapper.

  2. Channels can be smaller

    Since escape velocity for a bootstrapper might mean having a few thousand customers, not a million customers, then you can focus on growth channels that have a much lower ceiling. For instance, if you discover that buying tweets from BuySellAds.com has a positive ROI, then you can keep buying tweets and adding new customers five at a time. VC backed startups would laugh at the the unscalable nature of this strategy. However, “unscalable” is in the eye of the beholder. Buying tweets (as just a random example) may scale to exactly the size you need it to. Don’t let someone else define what scalable means for your startup.

  3. Acquisition can be manual

    Anything that isn’t automated, in terms of customer acquisition, is ignored when you’re trying to dominate a large market. You can’t do manual things and expect to grow enough to impress investors, but if you’re a bootstrapper then manual growth is perfectly acceptable. It’s possible to wake up everyday, as the founder of a bootstrapped startup, and manually email possible customers one-by-one, and actually acquire enough new customers over the course of a few months to reach your goals. Don’t get me wrong, I love automation as much as the next guy, but it doesn’t mean that manual processes don’t have a place in a bootstrapped startup when they are necessary.

  4. Retention can be relational

    Since a bootstrapped startup is dealing with much smaller numbers of customers then you have an advantage. You can treat them as your friends, and retain them through proactive relational bonds. If you only have 500 customers then you can easily find your power users and send them a personal note, thanking them for being awesome. You can easily find the people that haven’t used your product in a while (and might cancel, or stop buying from you altogether), and you can send them an email asking if they need help with anything.

As a bootstrapper you are playing by a different set of growth rules. Don’t let the “best-practices” of other startups arbitrarily limit you. By chasing hockey stick growth via automated high-growth channels, you might miss the boring, but gravity defying, methods that you do have at your disposal.

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1 comment so far ↓

#1 Reaching Escape Velocity as a Bootstrapper | Rocketboom on 09.17.13 at 10:16 am

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