7 Habits of a Bootstrapped Entrepreneur. Good Habits That Make Sense!
These 7 habits will make you a better entrepreneur
It’s been two years since I left my well-paying job in the Silicon Valley to return to India. Believe it or not, I was following my dreams to start Jodi Logik and my circumstances were such that I had to do it in India. As I look back at my journey so far, here are seven habits I wish I had known about from the beginning.
1. Learn to identify and measure the operational rhythm
A business is like a human being, it has its own rhythm and you should be completely plugged into it. What is an operational rhythm? It’s the timing of your cash flow cycles, customer behavior when using your product, peaks and troughs of customer activity, your engineering / manufacturing timelines or lead times, and the speed of your competitor’s moves (feature releases and marketing tactics).
Habit – Make it your habit to get hands on experience in measuring and monitoring the operational rhythms of your business. When you bootstrap a company, you are responsible for everything. You should be completely plugged into all aspects of your business, including areas that you are not familiar with before you took the plunge. Start enjoying the joys of exploring unfamiliar territories.
2. Beware of expos and the contests
There is a growing industry of companies that organize expos for startups to find customers and investors. Some of them even solicit startups to spend money to travel to foreign countries to find international investors. That’s not all, event organizers will sell you sponsorship packages that will supposedly bring you more customers. Just take a deep breath and pause.
Habit – Always have your bullshit antenna up and active. Think carefully before you spend money setting up a stall or spending money to travel halfway across the country to pitch your startup. There are no free lunches anywhere and your first priority is your customer and the product. By all means, attend trade shows and networking events, but cultivate the habit of thinking twice before spending money on events or contests.
3. Shut down non-critical spend like a boss
When you look around the web, you will see plenty of fairy tale startup stories, customary startup team photographs with a four-legged mascot to boot, cool looking startup ninjas sporting custom-branded T-shirts, photographs of space-age startup offices and stories about startup perks that will leave you wondering why you never thought of joining one of these cool startups.
Habit – Here is what you should be doing – don’t spend a single Rupee on anything that doesn’t directly help you meet the goals for your business. The primary goal for any bootstrapped startup is to generate positive cash flows. Make it your habit to keep all your expenses down to a big fat zero if they don’t directly contribute to your key business goal. After all, you are the boss.
4. Learn to fire toxic customers
When you are the new kid on the block, you are always on the tenterhooks hoping and praying for your first customer. When you land your first deal, it is natural to latch on to it all costs. However, demonstrating flexibility and delighting the customer costs you money and time. If you can’t get commensurate returns directly or indirectly for accommodating the whims and fancies of your first set of customers, drop them or you will sink.
Habit – Keep your antenna up for toxic customers and, when you spot them, run away from them! Toxic customers are those who you can never satisfy, they always demand non-standard features, they find fault with you even when you go above and beyond the brief, and most importantly, they drain your limited money and time with no promise of more business or referrals. Learn to say no to toxic customers, and learn to move on.
5. Monitor your competition as if your life depended on it
One of the mistakes entrepreneurs make is to start believing in their own propaganda. While you may be convinced that you have the best product in the market, your competition is probably busy eating your lunch. That’s the nature of the beast. Your competition is not run by Dodos (as you might think) and they probably have more capacity and resources needed to be successful.
Habit – Analyzing your competition should become your daily habit (or at least a weekly habit).
What new features are they launching?
Are they addressing the gaps you identified when you were researching the opportunity?
How are they selling their products or services?
What is their pricing strategy and how is it changing?
There are just a few of questions you should be thinking about all the time.
6. Don’t forget to fund your personal life
There are a couple of penalties that every bootstrapped entrepreneur should account for – the opportunity cost of working with no pay and the drain on their savings. It’s a double whammy till you can generate profits or get funded. You should always track how much money is required to run your household and have a plan to fund your personal life. Unplanned expenses such as a sudden hospital bill or a planned celebration of a family milestone should be given due thought and planning before you take the plunge.
Habit – Start planning your personal life one year before you decide to become an entrepreneur. Create a simple, monthly cash flow projection for at least three years after starting your company. The line items should include all sources of your income and all possible expenditures. Track this data on a monthly basis till you start generating sufficient income from your business.
7. Learn not to forget your folks
Bootstrapping a business is a grueling marathon that will leave you exhausted and with very little time for your family. Saturdays and Sundays no longer have any special significance for you unlike a regular job. Whether you disrupt the market or not, your sleeping habits will be disrupted and there is a real danger of you turning into the characters you find in The Walking Dead (aka zombies)!
Habit – While you go the extra mile to make things happen and keep the ball rolling, make time for your family. This might sound like a contradiction, but there are two good reasons to carve out time for your family.
It is possible that one of the reasons you signed up for a boot camp from hell (aka bootstrapping a company) is to provide a good life for your family. There is no point in making your family feel miserable and ignored.
The second reason is that they are your true cheerleaders and they should have every incentive to keep supporting you.
About the Author: This article is contributed by Srinivas Krishnaswamy – Founder at Jodi Logik.