Everybody loves to say that they are an entrepreneur. It’s prestigious because it’s a word that describes a type of hustle, ingenuity and chutzpah. Every week business magazines and blogs talk about venture capitalists and startup incubators and how many millions of dollars startups are raising now because money is running so freely. It’s almost as though getting a venture capitalist to invest is part of saying that you’re a successful entrepreneur.
The ability to get funding has nothing to do with the ability to run and grow a business. A true measure of success in business and entrepreneurship is bootstrapping. Can you build a business without borrowing millions of dollars from other people and pretending you have success? This is an often-overlooked skill set, but in the future, it will be one of the most valuable skill sets to have.
Because our economy is now global, it means that uncertainty and volatility are now the name of the game and it can come from anywhere. With the expectation of another global downturn somewhere within 2019 to 2020, the entrepreneur who can bootstrap is going to be the winner of the entrepreneurial business game.
Yes, it’s harder to bootstrap a business to success. However, it becomes more stable when it is not a debt-driven business, but by the skills of someone who can masterfully negotiate difficulty and volatility. Someone who’s got some guts, wants to be somebody great, who is driven to win and succeed.
The entrepreneur that is still standing when credit dries up and money runs out because they have the skills to figure it out on their own and the ingenuity to work by placing their blood, sweat, and tears in the form of sweat equity, in order to grow a company, will win.
It will be a very hard time for those entrepreneurs who can only begin the conversation with, “How do I get a VC to back my start-up?” These are the entrepreneurs who will soon be knocked out of the game in the next recession because credit will be tight, and investors will be hit hard. Your ability to put together an idea and execute the delivery of it, building it brick by brick with sweat equity will be how you as an entrepreneur will succeed. It will not be popular, sexy, or fun to call yourself an entrepreneur at that point.
It will actually be the hard work of bootstrapping entrepreneurs that will succeed over the long term. Every venture capital-backed business can look sexy. Right now, there’s a generally widespread belief among founders that venture capital is a precursor to success, that somehow a VC is the common denominator of the most successful tech start-ups. It isn’t a prerequisite, especially at the early stages of business development.
Many new bootstrapping business owners start with a capital-efficient product that helps them scale out their business over time and not overnight. By doing this they can prove profitability. They also get to manage the learning curve of truly running and growing a real business without the help of a venture capitalist.
Many bootstrapping entrepreneurs have gone on to create multi-million-dollar companies that have billion dollar valuations. The truth is, you can start with little or no money and build a successful business. If your business solves a real problem, you don’t really need venture capital to get started.
Solving an old problem with a new technology can be enough to build a multi-million-dollar business. Sure, it’s often embarrassing when you haven’t raised money and your company is starting out in Silicon Valley. You can’t hire employees off the bat because you just don’t have the funding. For me, the limited funds taught me cautious spending on market and staff. It taught me how to be frugal and look out for the growth of the company.
I wish we could honor the bootstrapping entrepreneur more and not necessarily the massive rounds of funding a company acquired. What if we valued the massive problem solved by a bootstrapping entrepreneur like Russell Brunson, and his company, ClickFunnels? He grew his company by using the direct-to-consumer funding source. He had to use lean start-up principles in order to grow ClickFunnels into the success it is today.
When you bootstrap your way to success, you learn by going through hardships and figuring it out along the way, which makes you a stronger entrepreneur over time, a better leader and a better CEO.
Don’t give up on your idea simply because you can’t find funding for it. Find your inner ingenuity and figure out how to take your product out to market without venture capital. Grow your company the bootstrapping way and you will become a strong entrepreneur.