The day after my class (Technology Innovation Entrepreneurship at KTH) visited the Epicenter, I and other two classmates went to the event “Bootstrapping your Startup” hosted there. So, in this post, I am going to tell you about this experience.
The aim of the event was to provide the audience with experiences and advices of three startuppers who decided to bootstrap their startups rather than ask for financing from VCs or other institutions. We can define the bootstrapping technique with the following sentences: “an individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company”. Thus, when speaking about this kind of startups we do not refer to future unicorns, but companies that has to monetize earlier in order to grow.
Peter Russo led the event and acted as a sort of interviewer and presenter; he founded several Startups and now he is involved in the no-profit business, thus he talked also about his own experience sometimes. The interviewed startuppers were three young guys:
- Fritjof Andersson (Founder and CEO, RelationDesk.com),
- Therése Gedda (Founder and CEO at 30minMBA)
- Andreas Andersson (Founder and CEO of DMG Education).
The discussion started with Fritjof, Therése and Andreas talking about their businesses, the first two RelationDesk.com and 30minMBA operate in the B2B business while DMG Education is in the B2C business. Here a brief description of what they do:
- RelationDesk.com is an online platform to manage customer relationships through the different social media.
- 30minMBA supports people in developing their business skills when it fits them with leading business concepts based on great books in audio and text on your mobile.
- DMG Education is an online music school.
In speaking about their first steps they gave some interesting information such as the no salary time, DMG Education was the one with the longest period with no salary that last for one and a half year. When you decide to bootstrap your company, you need to be profitable in a rather short time and thus saving on your salary is quite “mandatory”.
Each of the startuppers focused on something different and repeated it many times during the event. I think it is what they retained their success factor. Fritjof spoke about the importance of finding people, as both resources and customers, to build and develop a network. In particular he spoke about the method used by him of speaking directly with them. Thus, he exhorted the audience to participate more to startup events where it is easier to find the right resources interested in what are you doing. While Andreas continually repeated the importance for its company of Facebook ADS in bringing people to the platform. He did not know anything about it, thus it had to learn. This to say that when you decide to bootstrap it is more needed an enlarged knowledge rather than a specific knowledge of a selected discipline, and to highlight the importance of learning to use new and different tools by yourself. Instead, Therése focused on the role of a common culture in the company and talked about her case to show us an example of how to create it. In particular, she told us that when you cannot reward people through high salaries the climate on the job could fill the gap.
Later Peter Russo asked about the main tools used by them and if they have any suggestions. Therése replied and cited Dropbox, Buffer, Wilu, and when asked by the audience about cheap accounting tools she suggested Fortknox and Bilogram. Since the audience asked about free tools Therése said that sometimes it could be better to pay some services, because it is fundamental to choose what to outsource and what to do by yourself, even if you are bootstrapping. In particular, it is important to focus on the startup’s core business.
Then they spoke about the choice of having or not an office. While in Fritjof opinion, it is needed to separate personal life and work, Therése simply said that in her point of view the important thing is that the resources can work where they are more productive, also at home if it is the case.
Andreas touched the argument of prioritizing the resources to success and being efficient. Thus, Peter asked them about which is the most crucial resource in their opinion. Fritjof did not need time to think about it and promptly replied the “time”, how to spend your own time without wasting it in doing activities that do not add value or that it is better someone else does. While, again, Therése talked about company’s culture, she also mentioned that a common well defined culture has to be taken into account overall in the recruiting process.
Later Peter Russo moved the discussion to the lean argument: how to be lean, and what they mean with the word lean. Therése cited side thinking and talked about developing together with the clients. Fritjofsaid the same thing enhancing the importance of speaking with the customers before and during product development to better understand how to meet their needs. Thus, he suggested again to use private meetings and, as he said before, to set these meetings during events.
A guy from the audience asked about marketing tools. Andreas said their first growth was mainly coming from Facebook ADS, but that now their best advertising is to add value and use the students as promoter of their services. While Therése used a cheaper way, like simple stickers at events in which their potential customers could be interested about.
Peter Russo later touched the argument about how to convince people to work for you and from the audience someone asked about payment with shares. Fritjof said that the main problem about this way of paying resources are the taxes. Indeed they are not the same in every country, and in Sweden they are too high (70% confronted to 15% in the USA). Secondly, he said you should consider that it will be a long marriage, thus it is important you are sure they are the right people. Then, to reply to Peter question, they all mentioned paying people with “freedom”, “having fun” and other small things that create a nice job climate.
The climate at the event was really informal and relaxed, it was like meeting together speaking and sharing our expertise. I appreciated the fact that the audience was quite active and diversified: there were people of each age, who already started their business and who was interested in doing it with completely different backgrounds. The audience really guided the discussion together with Peter Russo, and this was the aspect that more I enjoyed there.