Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
“BOOTSTART your way to early traction (and beyond).”
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As investors have shifted from valuing ideas and intellectual property to valuing traction and growth, finding a path to early traction (aka paying customers) without external funding has become your job.
Like a lot of founders, I initially adopted bootstrapping out of necessity. But today, I view it as the default founder operating system.
The rules have also changed.
Traditional bootstrapping was often viewed as self-funding, but a better descriptor today is customer-funding.
This is why I coined a new term: “BOOTSTART”, which is a play on bootstrapping and starting up.
BOOTSTART combines the best of bootstrapping and running lean to systematically launch and grow an early-stage idea with the least amount of resources.
I’ve bootstarted all my products since 2009 to millions of users and dollars. In today’s issue, I’ll make a case for why you should consider it, too.
2 Underlying Strategies at Play
I. Business model risks have flipped.
Going back just a decade, starting up was expensive. Acquiring software licenses or equipment to build a product or office space to meet with your team required capital investment. Most of the starting risks were technical or product risks.
This has flipped.
Thanks to the Internet, Cloud computing, open source, remote work, and now AI, all these things have become “free”. Today’s challenge isn’t “Can we build it?” but “Should we build it?”
Answering the second question requires a traction-first versus a build-first or investor-first mindset.
II. A traction-first approach doesn’t require lots of money but the right focus.
Flipping your mindset from build-first or investor-first to traction-first forces you to prioritize value creation over feature creation.
Creating value requires you to first seek to understand your customers and their struggles before you attempt to pitch them.
When you are able to describe your customer’s struggles better than they can, you earn their attention and trust - making feature creation a lot easier.
3 Actionable Tactics
I. Keep your day job.
Startups are inherently risky, and I never recommend going all-in too early (often described as jumping off a cliff) and hoping you don’t crash and burn.
With the right problem/solution fit process, it is possible to
- find an opportunity (problem worth solving) as a side hustle and
- get to early traction in less than 90 days,
- irrespective of what you’re building.
II. Optimize for speed, learning, and focus.
Time, not money, is your scarcest resource. While traction is the goal, outlearning your competition is how you win.
This requires maximizing for speed, learning, and focus:
You can’t just go fast, or just learn, or just focus. You have to do all three.
III. Prioritize building a minimum viable runway.
It’s hard to build a “meaningful” company running part-time for too long or running too many other side hustles to pay the bills.
At some point, you have to take the leap.
Prioritize building a minimum viable runway as quickly as possible.
A minimum viable runway (MVR) is the minimum amount of monthly recurring revenue that covers your bills.
A good rule of thumb is aiming for $10k MRR / founder.
Some ways to get there:
- Focus on customers, not users.
- Charge from day one,
- Charge more.
Building an MVR allows you to buy back your time and reinvest it back into your startup. Converting time into learning (insights) and learning into traction is the flywheel that helps you grow your startup.
That's all for today. See you next week.
Ash
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P.S.
I’m working on a new BOOTSTART course for aspiring and early-stage founders who want to break free of the pitch-circuit or corporate rat-race and just start.
CLICK HERE if you’d like to get access when it launches in June.