15 Steps for successful Bootstrapping – Part 2

this is the second part to Bootstrapping – Part 1

Time to Cash – When do I get my money?

More important than “time to market” (when can I offer my product on the market) is “time to cash”: when do I get the money for my service?
For a successful bootstrapping, it makes no sense to sell and sell and to only bill once a year. Continue reading “15 Steps for successful Bootstrapping – Part 2”

Moving Motivators

An interesting technique from the Management 3.0 book “Managing for happiness” is the moving motivators exercise.

Motivators

Jurgen Appelo compiled motivational factors from different sources like Steven Reiss’ 16 basic desires, Ryan and Deci’s self determination theory and last but not least Daniel Pink’s Drive!

He came up with the following list of 10 motivators which can be best memorized with the mnemonic “CHAMPFROGS”: Continue reading “Moving Motivators”

Team Capability Matrix 

One of the many questions You hear as a team lead is: “Who can help me with <topic XYZ>?”

When your team is small you can easily say: “colleague A is expert on X, B on Y, and C on Z”.

But with increasing team size and number of topics you have to handle in your team it can be good idea to write down the capabilities and competencies of your team members.

Step 1 – Write down all of your team members

Easy. If You don’t know who is in your team, shame on You 🙂

Step 2 – Write down all tools and technologies You use in Your team

A bit harder. If You don’t know by heart who uses what, please interview your colleagues.

Step 3 – Combine the information in a table.

Use a simple scheme to tag knowledge

  • :mrgreen: – great knowledge
  • 🙂 – ok
  • 😳 – don’t know what it means

Write down the colleagues on one axis the tools and techs on the other.

[table id=1 /]

To transpose or to not transpose – that is the question

It doesn’t matter which info goes on which axis but in most cases you can say which number is higher: number of colleagues or the number of skills / tools / technologies used in the team. So put the longer list on the y-axis.

What can You get out of it?

When You have your Team Capability Matrix in place you can identify core knowledge areas -things everyone in the team has to know- and fill in the gaps with training and workshops.

Let’s say Tool X and Y are must have skills. So You would schedule training for Tool Y for A and C and training for X for B and C

You can even develop your team by asking your team mates in which areas they want to improve and schedule training accordingly.

 

15 Steps for successful Bootstrapping – Part 1

Bootstrapping – what is it?


Unfortunately, there is no Wikipedia article about Bootstrapping related to foundations. So here’s the attempt of a definition:

“Bootstrapping is a funding strategy for a start-up that ideally requires no outside capital and leads to growth of the business by avoiding spending and reinvesting revenue.”

Put simply: spend only money on your business that your business has brought in as well. Like Baron Münchhausen, you pull yourself out of the swamp on your own head.

If money has to be put into your business all the time, you run the risk that you are only promoting a hobby but have not developed a solid business idea. Benefits of this start-up financing is the extremely low financial risk and, in the case of business success, the feeling of having done it without the wallet of your parents.

However, the disadvantages should not be concealed. Anyone who has an idea that only works if the entire market is penetrated in no time, 1000 employees hired and high-tech production facilities are procured, for which bootstrapping is certainly not the right concept.

So, now to the individual steps:

Go live! – The first customer counts

Gray is all theory, or the business plan. The first customer willing to spend your money on your service / product is what makes the difference: is it worth keeping your idea or do you need to reconsider your concept?

Many founders write a gigantic business plan that would win any competition and have never sold a single item on eBay. WTF?

You have to get away from the desk and out to the customer and his problems. Your idea must provide customer value and win no prizes! Homework to the next part: Sell one product / one hour of your service. But beware: friends and family members do not count. The danger of pity is far too great.

Found as a side job

Since the chance is low that you can bring your product immediately to the customer, you should not immediately give up your current job.

Bootstrapping does not mean stomping a factory out of the ground on a green field and hunching 120 hours a week from now on, but testing business ideas for practicability and profitability.

Saturday used to be a regular working day and since your business idea should be fun too, you can also check out on weekends.