Pratham Mittal is the co-founder of VenturePact, a marketplace that helps companies find and engage with prescreened software development firms; he previously founded Newsance, and worked in Product at Host Committee.
Most first-time founders will have to initially fund their startups out of pocket. This means months of eating pizza, sleeping on couches and using cheap server hosting.
To go from this to raising your first round of funding is incredibly daunting. During this time you likely don't have any real revenue, your customers are apathetic about your product and you just cannot find a good enough developer to build your prototype. You are on the verge of maxing out on your credit cards and have no more runway.
But it's how you tackle times like these that sets you apart from everyone else. This is where you have to get innovative. When we were starting off at VenturePact, we decided to bootstrap. Here is what my co-founder and I did--that can likely help you as well--to get through the tough, early days.
Because we were engineers, we helped many of our friends who were starting companies with software development. In our spare time, we would hack together quick prototypes, set up e-commerce stores, build websites or help with tech interviews.
While consulting definitely helped us with bootstrapping, it was far more useful in that we learned a lot about developing quality software and built a strong referral network. This network ended up instrumental in getting great initial traction for our main business.
2. Travel Smart
During the first few months, my co-founder and I spent a lot of our time traveling to Southeast Asia and Eastern Europe to partner with software development teams for our developer marketplace. We used the money we saved from living in these cities to invest in hiring and paying for our first few hires.
First of all, it's surprising how much cheaper these cities are when compared to New York, even after including the travel costs associated with a trip. We were spending much less than what we would spend in New York while still managing a comfortable lifestyle. At the same time, the travel allowed us to build an amazing international network we could tap into later.
Do everything you can to save money on travel and build your network while you do it--it's worth it.
3. Invest in Side Projects
While we were traveling through India, we bought these locally designed jackets called Nehrus. When we returned to the U.S., we found our friends consistently showing interest in these jackets. So we set up an online store and started selling them.
We marketed the website on a couple Facebook groups and pretty soon, orders started coming in. Since I would just get ready-made jackets shipped from India, delivering on the orders didn't take much time. We were able to generate revenue that helped us get more runway as we scaled our main venture to the next level.
4. Embrace Remote Work
We hired great people wherever we found them, regardless of their location. Some of our early hires were people we had met while traveling through South Asia and Europe. The labor markets in these areas were way less competitive, so we were able to onboard the best talent and also retain them.
Remote work allowed us to grow our team more quickly as well as have an international perspective, which is very important given that our product has teams from around the world. What also surprised us was that remote work was a lot more productive and efficient, as we could do away with long meetings and office politics. This is a strategy any business can use.
Our team is now spread around the U.S. and internationally, and we are able to capitalize on 24-hour work cycles. We've kept this up even today.
5. Get Smart With Software Development
Early on, we leveraged some very useful plugins and frameworks to jump-start our product development. Instead of building everything from scratch, you can use a combination of open-source libraries and SaaS tools to reduce your software development costs.
By using these tools, we were also able to expedite our timelines and incorporate user feedback rather quickly. When we started improving the product, we had already spoken to many customers and learned about their needs.
It's Not All About the Money
At times, venture funding might be the way to go. It can help you grow faster and capture a market. So when we encourage bootstrapping to others, it's not because venture capital is bad, but because bootstrapping teaches you so much more.
Each of the above bootstrapping techniques not only helped us financially, but also helped us in other ways. Side projects infused the team with creativity, consulting helped us build a strong initial referral base, remote work made us more productive and development tools helped us iterate quickly.
We have come a long way since our scrappy days, but these lessons helped us discover the core values of our company. These experiences have been integral in helping us build an identity and a strong culture as well as a great company.