Bootstrapping our company has extended our runway.
I realize that might sound counterintuitive, but it has given us more time (albeit with fewer resources) to find product/market fit. If we had raised money last year, when all we had were wireframes and aspirations, it would have likely ended poorly.
It’s important for us to remember that a runway is simply a means to an end. The objective isn’t to focus on extending it. Rather it’s to get off the ground and be self-sustaining so that we don’t need to worry about it. Neither of us want our personal savings to fund a bridge to nowhere.
As we’ve spent the past year searching for product/market fit we have stayed true to our goal: to build a networking platform that makes it easy for professionals to meet new people. Treatings is a community of people open to sharing their work over a coffee/drink, so there are a lot of nuances of social dynamics we need to understand.
If we were to compare the process of building a company with constructing a house, we’ve been digging down, instead of building up, to create a solid foundation. Although this period of learning has been crucial, it’s anything but comfortable. Since my co-founder Paul and I try to test before we build, a lot of our progress is not outward-facing, or readily apparent. This, of course, prompts questions from friends and family who are tracking our progress by monitoring the site, wondering how everything is going when they don’t see new features being built.
While it can be unpleasant to defend perceived inactivity, I’d prefer that to feeling pressured to build flashy features, fueled by funding and a ticking clock to spend that capital. While this would have satiated passive observers, I know that when Paul and I left our jobs to start Treatings we were not equipped to handle outside capital.
Founders who have raised money have warned us that as soon as you raise venture funding the house is expected to be rapidly built up, at a pace dictated more by predetermined milestones than considerations about structural integrity. If driven by cash and expectations, we likely would have started loading bells and whistles onto Treatings before establishing a solid understanding of the problem our users have and the repeatable process we are implementing to solve that problem. This would have resulted in an unsound framework.
It’s not the manufactured deadlines that I fear, just the intervention to make bold bets before we’ve established our footing. Thinking back to school, even the most diligent students benefitted from imposed deadlines. In an experiment Dan Ariely chronicles in “Predictably Irrational,” MIT students were broken into three groups. All groups had to write three main papers over the course of the semester. In Group 1 the students were allowed to set their own deadlines, in Group 2 there were no deadlines at all and in Group 3 the teacher dictated three firm deadlines. At the end of the semester, grades across the three groups were compared. Ariely found that students with the firm deadlines got the best grades and students where no deadlines were set did the worst. The surprising revelation isn’t that students procrastinate, but that “simply offering the students a tool by which they could pre-commit to deadlines helped them achieve better grades.”
So how do we apply Ariely’s findings to Treatings? We aren’t spending anyone else’s money, so we don’t have a third party dictating deadlines. That’s unfortunate. Although I’m wary of what the stipulations might be, I’m sure we’d move faster if we had VCs breathing down our necks. But, that doesn’t mean we need to resign ourselves to operating unencumbered by goals or deadlines. We should be more disciplined about setting deadlines and holding ourselves accountable.
It’s too easy to set a deadline and rationalize between the two of us why it’s okay if we miss it. People often ask, “How long could you continue bootstrapping Treatings?” The answer is that if we were to continue spending at the low rate that we’ve been (namely supporting our bunk beds and coffee habit), we could go on for another year or two. But running out of money should not be the demise of Treatings. We must force ourselves to race towards the inflection point of testing our business model, seeing if companies are willing to open their checkbooks to leverage our platform for recruiting and employer branding. If they say yes, we will be off to the races, either building out the product and team through revenue or raising venture funding. If companies say no, we should pivot or shut down Treatings altogether.
Two weeks ago we set an artificial deadline of this past Wednesday to push up changes to our site that we’ve been working on for months. We finally optimized the site for a mobile browser, added an activity feed, bolstered user profiles and provided the option for a one-click indication of interest in meeting fellow members. The deadline was “artificial” because there wasn’t a critical event that demanded that we push up these changes. At our nascent bootstrapped stage, there are rarely times when others will hold us accountable.
Unless you count my girlfriend asking when I think I’ll have my own bedroom. Then there are many times.
This is the 15th installment of a PandoDaily weekly series that chronicles the experiences of a young entrepreneur as he bootstraps his startup.
Part 14, “A bootstrapped startup’s freelancer dilemma.“
Come back next Sunday to read the next installment.
[Illustration by Hallie Bateman for Pandodaily]