Bootstrapping to The Boardroom
Companies are all born in different ways. Each one is unique, shaped by their vision, their goals, and the industry they are in. Reality pushes and pulls, but eventually, they find their way. The people too, they make the difference, and different phases need different or evolving skill sets. Having built a company, let’s explore what skills and mindsets are needed, and how they change through the years.
PULLING THE BUSINESS UP
So, what does the journey from bootstrapper boss to corporate Boardroom look like? Well, what is bootstrapping first? The term has been around a long time, and used the expression “pulling yourself up by your bootstraps” was a metaphor for achieving success with no outside assistance.
It’s when someone builds a company from the ground up. Using nothing but their own cash, hoping to translate a great idea and hard work…and a touch of luck, into the first sales. Then using the money generated through ongoing subsequent sales to keep the whole process going. A positive and virtuous upwards business cycle is created.
As a technology entrepreneur and maritime informatics evangelist, I’ve only ever known one way and that’s bootstrapping. So yes, I have a confession, I am a bootstrapper — having spent 15 years making a business…building, cajoling, hoping and sell, sell, selling. Now my company is a success…what does it all mean for the bootstrapper in me?
Perhaps it is something about my nature, but the fight and drive needed to succeed against the odds feels more real and pure with only your cash, guile, ideas and energy to fall back on. Being self-contained, self-funding, self-driven…there is a lot of ego in the bootstrapper’s mirror. Every morning, staring at yourself and knowing that you are the one to make it all happen.
LONGEST WAY UP
Really though, bootstrapping isn’t just about finance where cash comes from. It is about mentality, discipline and mindset. The bootstrapper has a vision of the blueprint of success and every nut and bolt of getting the business built.
In many ways, there is a purity of spirit for the bootstrapper boss. The company is organically grown, failures are a hard chance to learn, and successes feel all the sweeter.
There are structural issues too, a bootstrapped business has been carefully crafted. Like an artisan watchmaker, all the cogs have been considered and very, very carefully placed. There is very little room for error constructing a business this way.
The route is longer, slower and there is perhaps more to see along the bootstrap journey. There is no sprinting or feeling the surge of investment, it is about the discipline of one step following another. With every sale providing the impetus, there is a realism to the process which investor cash can sometimes mask if it arrives in a business too early.
SMALL IN, BIG OUT
The constraints of bootstrapping are that there is a constant demand to get more from less. The smallest inputs have to be turned into maximum outputs. Every action needs an even bigger reaction.
There is a touch of alchemy to the bootstrapped business. The base metals of ideas, sweat and relationship building being turned to gold, at every point. It takes the mind of a magician mixed with the psyche of a scientist to throw the right ingredients into the pot.
There is never enough time or money in Bootstrap-land. That makes for unique approaches when it comes to finding solutions. Constraints lead to creativity, and that is partly why bootstrapping is so intoxicating.
It is business as part magic, part art, and all as part of a high wire daring act as lives, jobs, houses and relationships are all on the line. That is why it is so important that the bootstrap CEO looks ahead. There is nothing to be gained looking back as everything has changed so much, and if you look down well then you’re doomed. It is a singular forward focus and progression that makes a bootstrapper into a success.
THE PSYCHOLOGY OF SUCCESS
It is perhaps a sign of success that a bootstrapper can ever take the chance to think about how far they have come, can laugh at the good and bad times and think about what is next.
What next indeed, that is always the hardest point for the bootstrap boss. Knowing when to evolve into something else, to let the business come of age and step out on its own merits.
The company moving clear of the immense shadow of its creator — Dr Frankenstein letting his creation go off and be successful, JK Rowling letting Harry Potter grow and do things with lady wizards.
Before we leap into the future, it is perhaps important to dig a little into the psyche of the bootstrapper. A study into the psychology of bootstrapped company bosses looked at the “big five” personality traits. They found high levels of conscientiousness and extraversion. with low levels of neuroticism.
WHAT IT ALL MEANS
It is little surprise to learn that most bootstrap bosses tend towards being outgoing/energetic, and they derive satisfaction from interacting with other people. Bootsrappers are driven, efficient and organised, while being less nervous of risk, and more secure and confident in the course they set out on. The world of a bootstrapper is not one for those who experience negative emotions. It is a place of uppers, not downers.
This brings us to a very interesting and important point, let’s call it the selection inflection. The moment when we ask whether this company in this current form would have this person at the helm.
When a bootstrap firm becomes successful, it is actually by moving away from the traits of the founder. Its circle of influence changes and the ways of doing business alter too. This is an ironic yet natural and inevitable situation. It is positive that people can shape and make a company, and then it becomes bigger than any one person.
One day the successful company becomes not about a singular vision, but about investment, and things like risk management. There suddenly becomes more fear of loss than the rushing, gushing excitement of gain. Excitement, passion, hunger and drive are no longer the best emotions for the business. It needs a more corporate approach.
So, the extrovert is too giddy and engaged to be the reserved boss, the person who shies from negative thoughts cannot be trusted to understand the risk register, as they see only opportunities.
IT’S NOT ME IT'S YOU
The fact that a company can be at the point of divergence from its original bootstrapped roots should be a moment of absolute vindication and triumph. It means that things have worked, the risks were well-judged, the ideas good, and the pursuit of them worthy.
What then do we do with the old ways, with the bootstrap CEO, the person whose mind and heart are racing thinking about the next opportunity? The person who wants to scale back the office to get the claustrophobic excitement back, who resents having to think about losing money when all along they have made it. What does the bootstrapper do then?
Well, like a relay race, it is time to pass the baton. The bootstrapper ran an amazing first leg and has given everyone else a chance to succeed. Now it is time for new ideas, attitudes to prevail.
The hardest part for a bootstrapper is to let go. To allow investors in, to allow the corporatisation of their baby. It has to happen though and should happen. So, it’s time Captain Nicholls, your taxi is outside. “Who ordered a bloody cab, I can walk and save the company some cash”. Yes, it really is time.
