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By Douglas Burke
When people have access to so much capital, it causes them to lose sight of the big picture questions, like “is this solving a problem that people are willing to pay to fix?” Instead of a simple “trial and error” approach, they raced to scale up the business according to the amount of VC that was available, not the demand for the product. This situation and so many others like it show that money without direction blinds one’s sense of reality. Fortunately, the market is never blind to reality for long.
Here are some markers on the trail map to help you bootstrap an idea out of the wilderness and into civilization:
Determine if you're selling aspirin or candy. Aspirin solves a known, and hopefully painful, problem. Candy is a luxury item that people may want but don't need. I always prefer to develop aspirin (or, better yet, morphine).
Identify a problem that needs to be solved and develop a unique solution to that problem. Look to problems that both have a big market potential and where you've got some form of large competitive advantage.
Pre-sell the solution and validate the near (friendly prospects, early adopters, previous customers, etc.) market. Protect the solution if necessary (patents, NDAs, copyright, etc.). Try not to spend a dollar on development until you've pre-sold a significant amount.
Build a prototype of the solution and deliver it to your customers. Get them to further develop the solution by having them test, vet, and refine it. Ideally, you can get them to buy a prototype.
Build the solution and deliver it to your pre-sold customers. Gather feedback and adapt it to their needs.
Adapt and refine quickly. Differentiate and market the solution quickly. Build a brand and, most of all, sell, sell, sell. Selling is the most important thing here. Never stop selling. Follow the money with your product. Sell it and they will come. Finally, and this should be the mantra of every bootstrapper, never run out of money.
The same outdoorsman who taught me not to rely on outside help for survival also taught me that it’s usually best to act deliberately than bound into action. The post-boom entrepreneurs are teaching us a similar lesson. Even with the availability of outside capital, survival depends entirely on the ability to come up with a unique idea or product and sell it. When your own dollar is on the line, the will and motivation to survive – and succeed – is much, much stronger.
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