The Danger of Bootstrapping: Customers !== Business
Over the past few months I’ve become particularly aware of the boilerplate “getting to know you” questions that get asked at tech conferences and meetups:
- “What’s your name?”
- “Are you local, or did you fly in from someplace?”
- “What company are you with?” or “What do you do?”
My answers seem pretty straightforward. (Well, except for #2, but that’s a completely separate blog post.)
- “Brett Florio” (often spoken while adjusting my name tag so the right side is facing forward)
- “I actually travel full-time in a big RV with my wife and 3 little girls. So I flew in from [X] but I don’t actually live there.”
- “I run FoxyCart.com, an ecommerce SaaS.”
Conversation generally moves on from there, sometimes to industry-related topics, sometimes to personal topics like family, hobbies, travel, etc.
The surprising thing, however, is how wildly different the assumptions behind question #3 can be. In VC-heavy cities like San Francisco and Austin, I get questions like, “Have you found your product-market fit yet?” and “Do you have any users yet?” In other cities or in more bootstrapped-by-default crowds (like web devs and programmers), I get asked, “How long have you been around?”, “How’s that going?” or “How’s FoxyCart different from [Y]?”
The assumption I’m used to is: “If you work for a company, that company probably understands the problem it’s solving, and who wants to pay for that solution.”
The assumption that surprises me (as I interpret it) is something more like: “If you work for a company, odds are that company has no customers and is still trying to figure out what it’s actually selling, and to whom.”
Identical questions. Different worlds.
As the co-founder of a bootstrapped company, the “Do you have any users yet?” question is somewhat mind-blowing. Of course we do. How is that even a question? If we didn’t have users, we wouldn’t be a business. We’d be… something else, right?
I don’t think my tendency to laugh at these “VC type” questions is unique in the bootstrapped world. “Can you imagine starting a company if you didn’t clearly understand the value you bring to your target market, and have at least one customer ahead of time?!” But that initial reaction is dangerous. The underlying assumptions themselves are incredibly important, and it’s easy for us bootstrappers to think we have it all figured out just because we have positive cash flow and happy customers.
What can bootstrappers like me learn from the VC’s assumptions?
If we approach FoxyCart with the assumption that we haven’t figured anything out yet, what can we learn? Yes, FoxyCart has thousands of users, but which of those users are the right users? Yes, of course we’re bringing value, but is the value we think we bring the same value that our users are actually paying us for? And somewhat related: What is our vision, and how does that inform our plans for the future?
Those are the questions we’ve been grappling with for the past few quarters. We love what we do. We have a fantastic team. We have amazing users. But where do we draw the line with new functionality? How do we fit into a constantly evolving ecommerce playing field? How can we best serve our users while staying true to our original vision? What is our original vision? Who are our most important users? And most importantly (a la Simon Sinek), why?
When you’ve got growing revenue and happy users, it’s easy to ignore these questions. And it may actually be perfectly fine to do so in the beginning, to leave it implicit and worry about spelling it out later.
But it’s likely impossible to work it into a hugely successful business without having these questions answered. The venture capitalists know this, and since they’re pushing for massive successes (and not just “I’m paying my own salary!” successes), these answers are of utmost importance.
(This is reminiscent of the distinction between “owning a job” and “owning a business” that’s discussed in The E-Myth, which we highly recommend.)
So where does that leave us? You?
For us, we’re “excavating” our vision. We’re 7 years into this, and we wouldn’t have lasted this long if there wasn’t something at the core, but as we prepare to launch our v2.0 and our new hypermedia API after that, and as we look to the future, we’re faced with questions. Do we want to serve front-end devs, back-end devs, merchants, designers, or others? We want to make things easy, but easy for whom? Where should we focus and where should we scale back? Just because we have happy users and the revenue to show for it doesn’t mean we’ve got it all figured out. We’re working to refine our vision and our “why” so we can clearly and intentionally work toward our goals.
What about you? What’s your vision? Did you figure that out before or after you had paying users? What questions are we not asking ourselves? As you grew your business, what’s a question you weren’t asking yourself?
The views expressed in the above post are the author's own, and may not reflect those of FoxyCart.com LLC.