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Friday 4 December 2015

Bootstrapping your startup by bartering

I was recently reading a white paper by SVB Capital, "Portrait of a Modern-day Bootstrapper, How pre-funded entrepreneurs survive and thrive in the new age of technology startups".

The article covers some of the more common traits and habits of successful entrepreneurs who are passing on the traditional route of seeking VC and other outside funding sources for their startups.  Instead, these entrepreneurs are conserving cash and bootstrapping their operations by using some resourceful and creative ideas and approaches.

In a section of the white paper entitled "Bootstrapping the Balance Sheet", they recommend that startups barter for as many of the services they need as possible.

Barter for as much as possible. Finding creative ways
to trade services may not only save you money, it can
help you build closer ties with the people you work
with. “Not paying for services makes the vendor lack
commitment to your project and quality suffers,” says
White. “So you have to find a way give something back,
and avoid using equity if you can.”

I couldn't agree more, funding for the majority of startups these days is quite scarce.  Even if you do have access to outside funding, the more cash you can conserve without sacrificing the quality of your product, the better.

There is a quote in the article from Richard White of UserVoice about how they used bartering in the early days to not only conserve cash but to also build relationships.  

“We bartered for a lot of things in the
early days. We put logos of our vendors
up on our Web site and promoted them
in return for discounted, or free, service.
We actually found bartering a way to
build better relationships.”

                                    — Richard White, UserVoice

I actually use UserVoice on SwapRight (that feedback button on the side of the site) and think it is a great product.  I find it quite interesting to hear stories of some of the more successful web startups, and how bartering helped them achieve success by not only saving money but  also by helping build relationships.

If you are interested in bootstrapping tips, I would recommend reading the article, they also provide some useful links at the end to a variety of resources.


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