Bootstrapping a Startup While Working Full-Time

Wanting to Start My Own Business

Several years ago, while I was working full-time as a web developer at Strategyzer, I wondered if I could start my own business without quitting my current position. It was something that I always wanted to do. Yet I didn't want to quit my job and jump into the unknown of starting my own company.

This is the story of how my company, Surfer, started out as a side project.

The Journey from Employee to Startup Founder

Building the Product as a Side Project

There were several ways in which I eased into starting a company while maintaining my day job. First of all, having some great co-founders made things a lot easier. The more co-founders you have, the more you can split the responsibilities.

Second, we felt no pressure to "make it," because we were already earning livings from our full-time roles. We simply wanted to build a product and see what happens. Our goal was to see whether the software was useful.

Third, we didn't initially take on the stress of raising funds or dealing with investors. We started small. For a long time, we didn't even think about how to monetize our product. We didn't polish it. It was just a rough prototype—an MVP—to see if it could eventually become something that people would pay for. We continued to work in that manner for over a year before going all in. It was important to start slow and build confidence around our product.

Finding Investors vs. Bootstrapping

After a year, we decided to find an investor to be on the safe side financially. We found someone who signed a term sheet with us—this was the sign that we were on to something with our product.

However, the investor couldn’t provide the funds in time. By that time we had also had some heated debates about our salaries, so tension was palpable. The arguments combined with the investor’s inability to come up with the funds led to our decision to go in a different direction. We could bootstrap the company if we cut our salaries to zero—so that’s exactly what we did.

The downside of bootstrapping is that you need to be very mindful of how you're spending money. The upside of it is that you're self-sufficient. If you're profitable and spending wisely, you have positive cash flow; so you're not dependent on outside investors to keep your business running.

Now, we’re secure in the knowledge that our business is strong. We have a portfolio of many clients—some big, a lot of them small—so even if ten percent of them drop off, it won’t put us in any risk.

Tips for Starting a Profitable Company

• Start slowly and gradually commit more of your time to minimize the risk. When you're thinking about starting a company, take small steps. You don't have to start by finding an investor and hiring ten people.
• If you have a product, charge your customers as soon as possible to see if it's something that people think worthy of buying. The first few times that a customer bought our product was a significant boost of confidence.
• Find some loyal customers and incentivize them to pay for annual subscriptions. This is a great way to bootstrap your company. These days, everyone is fundraising and searching for investors. But in most cases, you can use your revenue as your "investment." Not enough founders take advantage of bootstrapping.