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Bootstrapping a business involves using personal savings to launch it. It is a term inherent to startups. Startups are a part of the Gig Economy works at a very face pace. We have discussed how the Gig Economy works here. Since the capital introduced consists of personal funds, bootstrapping gives entrepreneurs control over their business operations. On the other hand, if the startup welcomed venture capitalists, the entrepreneur does not have full control. However under the bootstrapping method, financial risks and limited capital hinder the growth prospects of the business.

Successful Bootstrapping Stories:


Braintree:Bootstrapping stories

Founder Bryan Johnson had been working in the credit card and payments industry for quite some time. However, he detested the corporate working conditions. Thus following his passion, he decided to bootstrap Braintree. His startup concentrated on working on the premium model as opposed to the popular freemium model. He was able to analyze and identify his customer’s pain points. Making his model risk free financially, he was able to capture the payments industry. In 2010, Braintree had revenue of $4.5 million. Later in 2013, PayPal acquired it for $800 Mn.



An email marketing company, MailChimp comes highly recommended for small and medium startups. Founders Ben Chestnut and Dan Kurzius started the company without any support from Venture Capitalists. They grew their business organically. The company had revenues worth $280 million in 2015 with 14,000 users added daily.

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Strategies for Successful Bootstrapping:

Exchange equity for expertise:

This is a relatively new concept where the companies trade the expertise of individuals for equity. Paying cash up front is detrimental to the growth of the business. By using the equity in exchange for the required specialized services, the business is able to build on cost-effectiveness.

Test the Market:

Testing the response of the market to the services provided can be done through economic tools. These include using the PPC model and analytical tools to evaluate the customer awareness of the product or service offered. Key metrics like open rate, click rate also needs to be monitored to understand the product/service acceptance. Customer feedback is also an essential feature of this type of evaluation.

Handle the PR needs of the Business:

In order to manage the business effectively, the founders need to handle the PR operations. Additional PR managers are not required since the business is in its inception phase.

Create a simple website for organic growth:

Organic Growth

One should follow a lean approach. Due to the low funds, investing in complex websites is not viable. Moreover, the main aim during the website development stage should be the development of a user-friendly interface.

Use Cost Effective SEO tools:

The best way to popularise the company whenever a potential customer searches for similar products is using SEO tools. The SEO tools are easy to use and a majority of them are available for free or at low prices. One can explore Google Analytics, SEOquake and SEMrush in this regard.

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Bootstrapping a startup involves bearing a lot of financial risks. There is limited scope for significant growth. However, this forms one of the best methods of organic growth. Startups with a clear vision and excellent teams have been able to effectively curtail costs. They have been able to pave their way for optimal growth. The key to achieving bootstrapping success is by being cost-effective and aware of the present and future needs of both the business and target customers. Startups that have been able to identify opportunities through comprehensive market research have been able to emerge as winners under the bootstrapping framework.

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