Bootstrapping a tech startup to profitable and sustainable growth is no small feat. It requires a unique set of skills, a laser-focused mindset, and a willingness to do more with less. However, it’s not impossible. Many successful founders have taken this path to build their companies.
In this article, we’ll share insights from founders in the Powderkeg community who are bootstrapping their companies to profitability and growth.
1. Balance Time Spent ON the Business Vs. IN the Business
“As a bootstrapped company, I find this question helps me discern where best to invest: Do we spend ON the business, or IN the business? Striking the right balance between internal and external investments is paramount for sustainable growth.”
Jake Miller, Founder & CEO at The Engineered Innovation Group
2. Focus On Generating Quick Cash Flow to Reinvest in the Business
“Bootstrapping is a great way for startups to grow and achieve profitability without relying on external funding. However, it requires diligent financial management and unrelenting resourcefulness.
One effective tip is to focus on generating quick cash flow. This can be achieved by offering services with upfront payments rather than long-term contracts or investing in equipment that generates revenue immediately. This way, startups can reinvest in themselves and fund their growth quickly.“
Emily Finkelstein, CEO at VentureXpert Advisors
3. Start a Side Hustle
“Start as a side-hustle if you can until ARR and profit are sustainable to support your first hire. We bootstrapped PureInsights with just $400. In 3 years we grew profitably to 100+ customers globally before we hired our architect full time. Today we’re a team of 8 with over 300 customers, still profitable, plus we’re debt free, with no outside investment. Side-hustle bootstrapping takes tremendous focus and effort and the right opportunity, so it’s probably not for everyone.“
Rick McGlinchey, Co-Founder at PureInsights
4. Build Up a Savings
“Launching any venture and growing it to a revenue-generating stage is a long process, as is fundraising. In fact, it probably takes two to three times longer than you predict it will! It’s imperative to have a steady resource flow during that time to keep your startup afloat. Sure, entrepreneurs can raise initial funds from their warm market, but not everyone has the “friends and family” option.
Instead, continuing one-on-one coaching that funds startup efforts while working toward launching and growing to profitability is a viable option. While it’s tempting to drop everything so you can focus on your startup, it’s always the smart option to stay in your current profession and build up a savings to draw on while you are in the founding stages.“
Corey Jackson, Co-Founder and CEO, Finding Sally
5. Build Sweat Equity
“Sweat Equity. When first founding a digital marketing agency, funds were, to put it mildly, tight. But I learned early on that we cannot underestimate the value of sweat equity. There wasn’t the capital to hire seasoned experts or run extensive ad campaigns.
Instead, we leaned into our strengths, dedicating longer hours and personally handling client needs. For instance, staying up until the wee hours, crafting tailor-made strategies for a client instead of using generic templates. This personalized touch not only saved costs but also built trust, leading to more referrals. Startups should remember that sometimes, it’s the time and personal commitment that become your most valuable currency.“
Joe Troyer, CEO and Growth Advisor, Digital Triggers
6. Work a Job While Seeking Your First Clients
“The key to successfully bootstrapping a startup is cash flow. Bringing in money helps you cover operating costs and allows you to reinvest in your startup. Fortunately, working a job is a great way to generate cash flow that you can use to bootstrap your startup.
This is why startup founders should continue working their jobs, at least before getting their first few clients. Most startup founders quit their jobs way too early, forcing them to take out loans and look for investors.“
Scott Lieberman, Owner, Touchdown Money
7. Focus on Profitability from the Start
“With startups, one crucial tip that I’d like to highlight is the idea of focusing on profitability from the start. Instead of just going all in and hoping for the best, you’ve got to be strategic. Look for niches that have the potential to bring in some serious cash. Don’t just pick something because it’s trendy or sounds cool—pick something that’s got that revenue potential.
When you focus on profitability early on, you’re not constantly scrambling for funding from outside sources. You’re not living on the edge, hoping your next investor meeting goes well. You’ve got the cash coming in, and you can reinvest it in your business to make it grow.“
Ewen Finser, Founder, The Digital Merchant
Bootstrapping a tech startup to profitability and growth requires a unique blend of resourcefulness, resilience, and innovation.
Remember that bootstrapping is not a sprint but a marathon, and every small win along the way can lead to significant long-term growth. Stay focused, stay frugal, and stay committed to your vision, and you’ll be well on your way to building a thriving tech company from the ground up.
We hope these insights will help you decide whether bootstrapping is the right path for your company.
If you are interested in exploring jobs at fast-growing tech companies in the Powderkeg community, be sure to check out our real-time job board for Tech Jobs in areas beyond Silicon Valley.
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Read more about bootstrapping a company:
How to Bootstrap a Startup with Doug Booth