To manage a startup at bootstrap stage is a real challenge. You have to manage your team, pay their salaries, market your products/services, pay rent, and what not!
Observing the startup ecosystem since 2012 and interacting with businesses from different domains, following will be my advice:
- Have a Real Business Model: You must must must have a revenue model with you and sooner revenue starts flowing in, the better it is. Focus on the profit rather than traction.
Numerous startups are running without a revenue model at present, with a belief that they will be able to convert traction into the revenues in future. Future is uncertain and by the time your revenues will start coming in, business environment may change, another rival may come up and your revenue-less model will get obsolete.
Just don’t be dependent on funding. You never know when you will get it. You may not get it even after licking the boots of an investor. What will you do then? Shut down your business? You are not here to pass time. Focus on revenues and profit. They will ensure survival of your business.
- Managing Team: It is true that people work for money, but most of them crave more for respect and comfort rather than huge amount of money. Fine compensation, but great comfort level can help you retain most of your team members. Encourage an environment of fun and positivity in your workplace, ensure they are heard, are made part of decision making, and get a feeling of belonging-ness. Come on, it’s easy to have fun with a small team. Assure them that their support to you at this stage will give them priority in your organisation in future.
If resources are really very scarce, then choose to have partners or co-founders with some share in profits, rather than a team with regular compensation.
- Marketing: Try frugal tricks for marketing your products/services. Sit down, and analyse your Return on Investment (ROI). Use calculations and analytics to figure out the best source.
How many clients/customers can you get from a source and what is the Customer Acquisition Cost for the same? What is the probability of customer conversion from that source? Spend your money only on that stream that gets you the maximum ROI.
First of all, ensure best quality of your service. Use offllne networking to promote the product, rely on word of mouth as it is unbeatable marketing tool even in today’s era.
- Administration: Ponder over the questions like do you really need rented premises to operate? Working from your own room won’t be a bad idea at this stage if you intend to save money. You can rather use that money to use better technology or promote your product. Do you really need to buy a new sofa for office? Used one might not be a bad idea at this stage.
Nobody will care about your frugal habits once you go big. It’s ultimately your responsibility to build up your business, and once you succeed to build the same, you will have many behind you following your path. Hope this answer helps. 🙂
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