How do you bootstrap your business to first traction? I’m Mimi Evans and I’m going to talk about bootstrapping your business and how you get traction.
Investors Want to See Traction
People ask me ‘what are investors looking for?’ Investors are looking for traction. Period. They want to see that you’ve proved out your business model before they invest their money. So in my opinion, bootstrapping seems to be an incredibly impressive and successful way to get to the next step, which is business expansion. And that’s really what you want investors for.
Hoses and Buckets : Where Money Comes From and Where It Goes
So what is traction? The way I explain it is by talking about hoses and buckets. Hoses are different streams of money coming into your business. So for example, your money is coming into your business, that’s one hose. That’s a hose you hope not to be going for very long. Another hose could be a kickstarter or maybe an early investor, maybe it’s someone in your family.
But the most important hose is the money and the revenue that’s going to come in from your customers, because ultimately that hose keeps running, at least that’s the idea. The buckets are where the money goes in your business, and so obviously you do not want leaks in your buckets. You want to keep those strong so you can hire employees and keep growing your business, and of course pay yourself a lot of money, that’s the idea. So getting your product out there to your customers is the way to get that traction hose that revenue hose going.
So if you’re sitting in your office all talking about how much you love the new feature of your product, you think it’s so awesome, guess what? It doesn’t matter! What matters is do other people, other customers, other people who are going to reach in their pockets and pay you money, do they want your product? So this bootstrapping, this getting this revenue hose going strong is a great way besides some of the other ways, like Kickstarter and your own money, to get your company going. It’s also the hose that those investors are going to care the most about because it proves out your business model. So how do you do it? Number one: get a simple tracking system.
There are systems out there like Trello that you probably already know that you can use as a CRM. Put all your prospects on there and then move them to the right. Number two: and probably most critical is discipline yourself to get in front of those prospects that are on your Trello list. So number three: have some fun, spend time in front of those stakeholders, and I promise you that will make all the difference in the world for your business