how to bootstrapa start up april12
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how to bootstrapa start up april12
- 1. How To Bootstrap a Start-up Workshop Presented by Paul Grant In partnership with Sponsored by
- 2. Take the Blue pill or the Red pill? Photo credit: the matrix
- 3. 1% or less Chance of success in raising equity capital if you took the BLUE pill
- 4. Bootstrapped companies ♦ Amazon ♦ Ben & Jerry’s ♦ Body Shop ♦ eBay ♦ Hewlett Packard ♦ Ikea ♦ Marks and Spencer ♦ Oracle
- 5. So what is ‘bootstrapping’?
- 6. Definition “The term ‘bootstrapping’ comes from the book The Surprising Adventures of Baron Munchausen, in which the main character uses his bootstraps to pull himself out of a swamp.”
- 7. Why bother bootstrapping? 1. It creates massive value 2. It reduces the risk for investors 3. Mistakes come cheap 4. Inside knowledge of your business 5. There is not much choice
- 8. Eight pillars to bootstrapping 1. Clarity of vision 2. Street-smart accounting 3. Travel light 4. Pick a battle you can win 5. Leverage credibility 6. Leverage other people’s resources 7. A clear business model 8. Everything is marketing
- 9. 1. Clarity of vision Photo credit: Flickr jek in the box
- 10. What makes a great USP? “Fresh hot pizza delivered in 30 minutes or less. Guaranteed."
- 11. Crafting your USP ♦ What does your business do? ♦ Who is your customer? ♦ What is the biggest benefit of doing business with you? ♦ Can you prove your claim? ♦ How will customers perceive this benefit compared with the competition?
- 12. 2. Street smart accounting Photo credit: Flickr jek in the box
- 13. The bootstrapping phase is all about... Cashflow - creating and managing
- 14. Watch these figures like a hawk 1. Cost per sale 2. Average value of sale 3. Repeat orders 4. Gross profit 5. Overhead 6. VAT return 7. Projected forecast 8. Comparison against previous year
- 15. Alternative sources of capital 1. Vendor funding 2. Rental 3. Factoring / invoice discounting 4. HP / leasing 5. Overdrafts 6. Credit cards
- 16. 3. Travel light Photo credit: Flickr jek in the box
- 17. Travel Light ♦ Keep to variable costs ♦ Avoid the payroll sweats ♦ Outsource all but what makes you great ♦ Become a kitchen table tycoon ♦ Avoid capital expenses.
- 18. IP Costs – patents & trademarks ♦ What does 3% represent ♦ Still want to go for it? ♦ Get one hour – free meeting ♦ Do the search yourself ♦ Research and get the product right ♦ Then, hire a patent lawyer ♦ Make sure you get a fixed rate “Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats” - Howard Aitken ( built the first IBM “Harvard” computer
- 19. Low cost or no cost tools ♦ www.fiver.com ♦ www.elance.com ♦ www.interns.com ♦ Open Coffee “meetup group” ♦ Mailchimp
- 20. Case Study ♦ Researched the market in the US ♦ Launched from his bedroom with £300 ♦ Promoted on My space & Friends reunited ♦ Within a year achieving £1k in sales a day ♦ Flipped the business model for scale ♦ First big customer - Dell ♦ Launched in europe ♦ This year has a Turnover of £9m
- 21. Time for a break Re-start in 15 minutes
- 22. 4. Pick a battle you can win Photo credit: Flickr tharrin
- 23. Pick a battle you can win ♦ Think niche, niche, niche ♦ Who are your early adopters ♦ Sell aspirins not vitamins ♦ Do not try to educate a marketplace
- 24. 5. Building credibility Photo credit: Morgue file Pedro J Perez
- 25. How Bill Nyugen of “Color” raised $41m from VC from one 45 minute meeting
- 26. Building Credibility ♦ Find first class mentors/non-execs ♦ Pay them equity stakes up to 5% ♦ Or in lieu of consultancy contracts ♦ Associate yourself with established brands ♦ Get high profile customers at cost. ♦ Build list of testimonials
- 27. 6. Leverage other people’s resources ♦ Premises ♦ Technology ♦ Contacts ♦ Databases ♦ Distribution channels ♦ Credibility Photo credit: Flickr wZa HK
- 28. 7. What is your business model? ♦ How is your business going to create cash? ♦ Low investment of time ♦ Low acquisition cost ♦ Get the cash quickly ♦ Repeat customers are king
- 29. Prepare for the pivot Photo credit: Gettyimages
- 30. 8. Your optimum sales strategy Photo credit: moneyning.com
- 31. The fruit guy has a system Battle you can win Out of town Hungry crowd Drivers Reach them cheaply Stall Core marketing message Sweet cherries – picked today Pricing and business 50% more than average model by the basket
- 32. Bootstrap marketing approach ¨ Use the power of JVs ¨ Only measurable marketing ¨ Crystal clear USP ¨ It’s a numbers game ¨ Test, test and test again ¨ Discover your optimum sales strategy (market, message and price)
- 33. Low cost or no cost marketing ♦ PR – find an angle ♦ Social Media ♦ The free giveaway ♦ Repeat customers ♦ Piggy-backing high profile people and companies
- 34. Case Study ♦ Researched market ♦ Proof of concept ♦ Then…searched for investor ♦ An e-mail and 9 months later ♦ £250K for 20% of company ♦ Sold Coca Cola 10-20% for £30M in 2009 ♦ Sales approx £100M last year.
- 35. When is it time to quit bootstrapping? ♦ When you have proven the concept ♦ When you have a predictable system ♦ When you are making profits ♦ When you can scale what you’re doing Then look for an investor...
- 36. Eight pillars to bootstrapping 1. Clarity of vision 2. Street-smart accounting 3. Travel light 4. Pick a battle you can win 5. Leverage credibility 6. Leverage other people’s resources 7. A clear business model 8. Everything is marketing
- 37. So what now? • One-to-one sessions at the British library on the 3rd and 10th May 2 hour breakthrough slots - £190 • Exclusive Coaching programme keeping you on track with regular meetings and support - £250 a month • “Funding for fast growth” June 5th one day investment programme £119 or £79 with discount All heavily discounted and subsidised for past attendees?
- 38. Your feedback is welcome Please take 5 minutes to complete form
- 39. Thank you Paul Grant T - +44 (0)7990 528945 E - pgrant@thefundinggame.co.uk With thanks to our sponsors/partners:
Notes de l'éditeur
- Success Rate From my own findings From the findings of VC/ Angel groups This figure is optimistic. Playing the game dramatically improves these odds Here is the reason why so few entrepreneurs win at the funding game
- “ Bootstrapping alludes to a German legend about Baron Munchhausen, who was able to lift himself out of a swamp by pulling himself up by his own hair. In later versions he was using his own boot straps to pull himself out of the sea which gave rise to the term bootstrapping. A bootstrap was a loop of leather sewn onto the back of each boot to hold onto when pulling boots onto one's feet. Bootstraps were still being used on leather boots during the early 20th century. In popular fiction when a poor boy became wealthy through his own efforts, he was said to have "pulled himself up by his own bootstraps". This metaphor continued into business financing where a highly profitable business might grow rapidly without external financing”
- Tesco food delivery: Fussy Pickers, careful packers, helpful driver Ocado: Tesco prices Waitrose quality What is so good about the USP? It is short - under two sentences It marks them out from everything else in the market It understands what the customer wants It sticks to its niche It is perfumed with credibility
- Crafting your USP
- Self Priming using own cash float Starbucks – using 3 stores to self-fund Manage cashflow Reduce burn rate
- Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats. Howard Aitken – built the first IBM computer
- Doom, giving it free. Making it very hot Signed up major distributor with delux version
- Coffee break
- Doom, giving it free. Making it very hot Signed up major distributor with delux version
- Where do you find an Angel Investor? Great Eastern Forum Oxford Network Thames Valley Network Envestors
- Ask Yourself: 1. What funding level am I playing on? 2. What players do I need to approach? 3. What tools do I need to win the funding game? 4. What are the next steps?
- Please complete the questionnaire – it should only take 5 minutes. Thanks.