Hacking the Psychology of Bootstrapping: The Chanty StoryBy Dmytro Okunyev | Thu, 03/17/2022 - 15:00
When I was a kid, I always heard the phrase “pull yourself up by your bootstraps.” Well, this is exactly what you need to do in a bootstrap business as well. You literally pull yourself up on your own without any help from the outside.
Let me begin by defining what bootstrapping really means in practical terms. Bootstrapping refers to funding your business entirely with your own money, with no interest-bearing loans or investors telling you how to run it.
Chanty, a collaboration tool, is my perfect story of bootstrapping. Initially, to start with my own funding of the business, I had to go through the path of sales because that was my investment channel. Selling your idea can be a tough task in the beginning. However, I was determined and did not hesitate in the face of rejections. You need to be passionate and determined to go through this process. Your idea is your life, your baby, the love of your life and if you really believe in it, you will go through it.
Believe me, when you hear that first “no” or “this will not work,” that's when your journey truly begins. You need to start working hard on proving why it will work. Selling your idea will get you the revenue and investment you need. So, you have to work on it and once you master the art of improving it, you too can build a profitable firm from scratch. To do that, Chanty focused on a few things.
Firstly, I tried my best to get together a strong founding team. Hiring can be an expensive process initially. However, it is most important to get you started and share responsibility with innovative minds. Chanty started off with a strong founding team of a marketer, a designer and a developer. Together, we worked extremely hard to make the business a success and to sell a product that customers really wanted.
After I found a good team, it was now time to acquire customers. Trust me, this is the most challenging yet fun part. The main cash you can generate from bootstrapping apart from your own savings is through your customers. You can do this by scaling your network and spreading the word about your idea and product. This can be done through pitching on LinkedIn, emails and cold calls, for example. Do all it takes, spread the word everywhere. That’s what we did. We got our customers by acquiring the angry Slack users. We saw that they were missing a few essential elements in the product and we promised to deliver the missing puzzle piece. It’s important that you study your customers well and work hard to deliver them too. If you are able to successfully acquire and retain even a handful of customers, you will be able to spread your services through their positive word of mouth.
Another thing that Chanty successfully did and you can do too is to learn how to effectively give a demo. Solve your customer’s problem in the demo by describing your service as a story instead of just stating the best features of your service. Let me tell you an interesting fact here: according to a study by Harvard, when you tell a customer about your service as if you were solving their problem, it triggers the area of their brain that is activated when a person’s headache is relieved. Therefore, always make sure to solve your customer’s problem.
One very important factor is momentum. Go all in and don't be afraid to learn from your mistakes or improve the process of pivoting. Don't be afraid to have years where you are going to be unprofitable. Capitalize on the fact that you have found a niche and that you have built a product that is ready to be scaled. It takes a lot of time and hard work to start a business but how much you put in is entirely up to you. Rather than judging your success and productivity by the number of hours you work, set monthly and annual goals for yourself and reflect on what went well and what could be improved at each milestone. This will enable you to design a strategy for future success.
Lastly and most importantly, when I decided that I would bootstrap Chanty, I made sure to have a proper business plan and prepare my team for different situations. To keep up with such situations, I always make sure to enhance my personal expertise and the skills of my employees so they can do diversified tasks and handle various situations. To do so, I always make sure that my employees are constantly increasing their learning curve by taking online courses or workshops. These courses and workshops can be taken for free from multiple sources so no costs are involved in this strategy. To bootstrap effectively, it is very important that your team is doing their job well, without any interruptions, and if faced with a challenge, they should be able to handle it well on their own too.
Every time Chanty is bought by an organization, it helps improve the productivity of their employees. This means that morale goes up and work gets done better and more efficiently. Don’t ideate to get in the market to sell but, rather, to solve a problem. Most importantly, enjoy what you do.