Bootstrapping is extremely common among entrepreneurs in all areas. Marketing is another area where you may consider bootstrapping. But marketing is an area where you can't necessarily compromise on, and when you can do so it isn't always the best option. With 90% of startups failing, you may be tempting fate.
This guide is going to show you some of the main reasons why this is not the time to compromise on your business.
Missing Out on Key Expertise
The difference between an established company and a bootstrapping entrepreneur is the company has marketing expertise on their side. They have brought in outside marketing experts so they can get the job done. This is the expertise that you absolutely shouldn't miss out on when you are first getting started.
Unless you already have marketing experience and an intimate understanding of your industry, you are not going to be aware of the strategies and the pitfalls of marketing in your industry.
Failing to Scale
Let's say that as an entrepreneur you have found something that works. You may have been split testing Facebook ads and one of them has finally come good for you. That's great, but you may be unpleasantly surprised to discover that your bootstrapping ways means you've run out of money at the critical time.
At least 90% of your overall budget should be allocated to marketing because it's the momentum that keeps startups going. Many companies gain traction, but then immediately falter because they don't have the funds to keep scaling. This can be critical because these opportunities don't come along often.
You either scale your business now to take advantage of the opportunity available to you, or you potentially throw your company away.
The Lack of Innovation
Marketing is an area that is constantly evolving. What works now won't work in exactly the same way six months from now. You need to be at the cutting edge of your trade if you are going to ensure that you get the best possible results. A lack of innovation can be crippling.
More importantly, you will find that you are unable to adapt to big innovations pioneered by others. For example, at the time big data first emerged those early adopters had a huge advantage over their competitors. And that's because they were committed to innovation.
Some people may call it a skunkworks. It's the area of your business that's encouraged to shoot for the stars or die trying. This money is designed to be lost in the pursuit of greater achievement. Bootstrapping entrepreneurs tend not to have access to these things.
Too Conservative in Your Approach
Conservatism only works if you happen to be a huge corporation with a monopoly over your industry. When your customers have no choice but to buy from you and there are no other viable competitors, then you can be conservative. But until that time you are always competing with hundreds of other businesses.
Bootstrapping has the habit of encouraging a conservative approach to business. While you should never be at a stage where your business is reckless, being too conservative is just as bad because you will become stagnant.
Should You Ever Opt for the Bootstrapping Approach in Marketing?
It all depends on what extend you intend on doing this. There are entrepreneurs who are determined to spend the bare minimum because that's all they have, and they are terrified of borrowing money. This is the wrong way to opt for the bootstrapping approach.
However, if you have simply brought up your personal savings instead of opting to shoot for private investment bootstrapping can be a great way to get your business off the ground.
The right way to bootstrap for your business is to never stop innovating and to never turn up your nose at a good opportunity because of money. You should have the capacity to be conservative not reckless, but you should also have the bravery to cast aside this mantle in order to take advantage of whatever fantastic opportunities head your way.
Bootstrapping is something that has become more and more common for entrepreneurs. People are more interested in trying out an idea before committing a huge amount to it, and that's perfectly fine. But bootstrapping should never become an overly conservative approach.
You need to temper being frugal and taking calculated risks. That's how to make it work.
What are your views on the bootstrapping phenomenon?