The Best Boots Have Straps: Deciding to Be a Customer-Funded Business
Thinking about funding can be SO confusing when you’re first getting started. Whether or not you choose to seek investor funding or bootstrap your business is an important decision. I think it’s critical to remove ego from the decision and then consider the business you want to build and your personal preferences on how you want that journey to be. If you believe having full control over company direction and decisions is worth it, strap on your boots and get to work!
When I was in the process of launching Odetta, a platform providing business outsourcing services leveraging a virtual, global team of superstar women, I hated it when the VC(s) told me to remove our social mission because it limited our market size OR just build a lifestyle business. I was annoyed when the impact investor(s) told me to merge with some other seemingly similar business that was not similar at all. When Development Banks showed interest, I was excited but then learned that it would require us to change our strategy completely. That said, I’m grateful for all those conversations because fundamentally helped me define my intent and mission.
My intuition led me to pursue bootstrapping and customer-funding, and I could not be happier with that decision. With customers, you know your strengths and weaknesses. If they like it, they spend more, and if they spend a lot more, then you need to hire to support it and if not, you need to fix whatever is not working. Having such responsive funding can be difficult, but it helps isolate and improve the company faster than investor funding would. It may take us a bit longer to reach our goal of 1M women working asynchronously in our global work community, but with patience I have faith we will get there, and it will be powered by us. I am so grateful we did this because now it means I can live anywhere and we can recruit globally ~ no required offices in Silicon Valley, no fake local offices to show presence. Rather than focusing on goals set by VCs, I get to prioritize our global team, our clients, and the work we produce. And this made us more resilient during the time of COVID.
Deciding to Bootstrap
Ultimately, bootstrapping allowed me to maintain control over our vision. Because we do not have an exit strategy, nor a unique opportunity that is going away, the alignment with a VC is not there. In the process of speaking to many funders, I realized that I did not like the power dynamics at play, and I would only engage when I had the upper hand. But this goes back to my own unique childhood to explain this.
I realized that I wanted to always be able to show up as me ~ a more introverted person who tells the stories of others. I decided to take my time and build the company in a way that felt authentic. I’ve still got questions. But I am speaking my truth when I talk about overcoming challenges, and when I talk about building a different type of company. These are all unique to me.
I am wildly independent, and as such, that impacts my decisions around the company that I want to build. Having control of the direction of Odetta was important to me– and in Silicon Valley during crazy valuations, I just felt like something was off.
Exercises
Before making the decision to bootstrap, I ran a few thought experiments. I built a list of my “whys”, my “big dreams” and my “personal preferences.” These all led me to build a bootstrapped company.
So is Bootstrapping Right for You?
Considering your “whys”, “big dreams” and “personal preferences” will help you decide what path is right for you and your business. If you have a strong desire for control over the business’ mission and your preferences and dreams align well with a bootstrapping lifestyle, bootstrapping is a great choice. At Odetta bootstrapping has allowed us to control our journey and experience in ways we couldn’t have with traditional investor funding. If you’re independent, determined, and have a specific direction in mind for your business like me, you won’t regret it– and I know I don’t.