We’ve all heard the stories of companies like Zerodha, Zoho, and others that dominate the market while being bootstrapped. Can something like this be done today? Can we still start a successful bootstrapped business? Willn’t the funded thugs put an end to your bootstrapping? Let’s see if we can find an answer.
It is extremely difficult to have a successful startup, and the task becomes even more difficult if it is a bootstrap startup, and even more difficult if there are sharks ready to eat you with VC funding. But you can make it out.
However, many bootstrapping entrepreneurs are afraid of it.
The idea is that if they bootstrap and work on the proof of concept, and they made it out. The trial is a success, and they roll out the MVP to a larger audience within the constraints of their budget. Users begin to enjoy it, but then the real game begins.
According to them, another entrepreneur may see them and decide to build something similar with VC funds in order to gain better features and visibility. Then their hard work and money would be for naught, and he would win because of the VC money.
He would give discounts that you couldn’t and users would go there, and as you went out of business, he would raise prices and win.
This is very imaginative, like a fairy tale or a devil tale. You must overcome your fear and ask yourself these questions.
If he can start seeing you, can’t you get VC money seeing him?
Who has more data and knowledge about users and problems?
Who provides a more genuine service or product?
Won’t he get competition, or come in future if what you are doing is profitable?
VC funding can be very beneficial, and he may get a lot of people to look at his product and possibly use it. What matters is how long they stay there. How many times do they buy again? Do they become loyal customers?
You may have fewer users, but they are loyal to you because you provide excellent service. By burning money, he may gain more users, but they will come and go. However, your customers stay. Aside from that, if his users come to your platform, they will become yours due to better service, but if your users go there, their trust in you will grow.
I’m not saying you shouldn’t take VC money. Investment is required to take our business to the next level and expand all operations, but it is only your vision and product that will bring you loyalty and profitability.
Funding is great for producing more, but you have to figure out what to create on your own, and that is what makes the real difference.
