The More Results, Less Stress Guide To Bootstrapping

Page history last edited by Aaron Ross 7 mos ago

PASSWORD: trust

How can you start a company and have the best of all worlds: more fun, more freedom and more money?

INTRODUCTION

Starting a business does NOT have to be as hard as people make it out to be! If you read Small Pebble, Big Wave and it sounds good, keep reading below...

I do some free coaching of small businesses through SCORE (www.score.org), the free coaching arm of the Small Business Association. I've also talked with many first-time entrepreneurs while I've been at Alloy Ventures. I'm also starting my own company(s). From all these conversations, here comes version 0.1 of "The More Money, Less Stress Guide To Bootstrapping A New Business".

Practical PebbleStorm Ideas To Use Today

PebbleStorm itself is a vision for the future of frictionless work - hyper-productivity without "work". It is totally achievable to have more fun, more money, with less stress! This vision of frictionless productivity isn't as far away as you think - we're working on some case studies already. This bootstrapping guide intends to assemble pieces of the vision into a set of practical ideas that people can begin using today.

PebbleStorm's Golden Rule

Effortlessly maintaining your passion in the business is essential. That unfettered passion is what motivates you, makes it fun, and is what convinces other people that they need to be a part of it as a client, partner or employee. Thus, the core of the philosophy around the guide is PebbleStorm's Golden Rule: "FOLLOW YOUR ENJOYMENT EVERY DAY. In other words, every day, figure out how to do more of what is interesting and enjoyable and less of what is not."

You Can Contribute...

Personal Stories and Suggestions on the Bootstrapping Guide (feel free to put yours in there or just email me)
Feel free to add your own notes into this main page itself, just please include your name at the beginning of each section.

List of topics, unranked (some are still duplicative...)

Start with your first, but you can try multiple ideas/companies! You have more time than you think, and it's much riskier to NOT try it
Have a plan, but hold it lightly
Take the time pressure off - get a job
Do NOT work on the 'today' business full-time - spend 20% of your time on the 'tomorrow' business
Make progress in bite-sized chunks / babysteps
Free your passion: how can you make your work as interesting as possible?
Make every day interesting (change or let go of non-interesting work)
Find a partner (use the buddy system)
Not done yet: Try turning clients down / say no to clients (Ryth's example)
Be dispassionately passionate
Be patiently aggressive
Make it easy for customers to try and to buy (Layers of the Onion)
The business will grow on its own, without help from you! (And what to do if it doesn't)
Lighten the load: stay lean and spend less: the less you spend, the easier it'll be to get to self-sufficiency / sustainability
First community, then business (/build on your strengths?) Blah - I need a new name for this)
Focus on your unique genius - be yourself, be authentic
Do more with what you have first (before worrying about doing entirely new things)
Rally your extended team around common passions
Be good
Be long-term greedy
Build trust in yourself
Get feedback, but trust your yourself / your intuition first
Build as little from scratch as possible (hopefully nothing...)
Do less

Start with your first, but you can try multiple ideas/companies! You have more time than you think, and it's much riskier to NOT try it.

The first step is deciding to DO IT. Mentally/emotionally commit. "Commitment" is not quitting your dayjob / income stream to work on something full-time. Commitment is the emotional/mental commitment that you will try something, or that you BELIEVE something is possible.
Create the intention.
Even if you think something might take a couple of years, that's all the reason to try to begin doing something about it now.
A couple of years is nothing! Think about time in perspective to your lifetime...
- If you worked on one new business every 5 years, you could try 8 of them between ages 30 and 70
- If you worked on one new business every 2 years, you could try 20 of them between ages 30 and 70
- If you worked on five new businesses every year, you could try 200 of them between ages 30 and 70

If you worked on 20-200 ideas, what are the chances that at least one would do great?
Isn't it a bigger risk to NOT try turning your ideas and passions into income/wealth-generating businesses, and thus consigned to a life of 9-5 jobs, salaries, 401ks and social security?

Are people around you undercutting you and your commitment? How To Doggedly Pursue Your Dreams Despite Naysayers

Take the time/financial pressure off - get a job

Klia Bassing: "It was shocking to think about taking a part-time job because I had it in mind that that would be "failing"...going backward in a business that used to support me entirely (but in an unsustainable way, with me as the only teacher/service provider). After a bit of grieving, the clouds cleared and going back to consulting at the World Bank--or wherever--a few days a week just felt like self-care of my financial and mental well-being. "

You can't control how long things take, and worrying about it will only drive you crazy.
- If you don't believe me...of the important things in your life, how many did you really control the timing of?

You can help yourself stay in the present by removing sources of stress. Consciously create a healthy environment for yourself.

You can't MAKE things happen or people buy - all you can really do is create a fertile environment for them to do so.
Because you can't MAKE people buy, you can't predict how long the business will take to become self-sufficient.
If you can't predict how long it will take to be able to support yourself from the business...you can't predict how much money or time you'll need to get there.
Even if you think you can predict it, it will take longer than you think anyway.
Let go of time and stop worrying about time and how long things will take. Practice being in the now. I thought the book was a little long, and not worth reading cover-to-cover, but The Power Of Now is very useful and worth reading.
Don't force yourself to guess. If you maintain some kind of source of income (even from part-time consulting), you don't have to worry about how long things will take.
Get things started on the side, part-time.
Ignore the people who tell you to do it full-time.
If everything doesn't come together in the first year, don't worry about it. Great ideas need to simmer too.
Two year rule: When starting a product or services based business (excluding consulting), expect it could take two to three years to go from idea to stable income.

BELIEF in yourself and the idea can make time irrelevant too: if you truly believe in your passion, and that your idea will happen, why does it matter when it happens? It will come.

Have a plan, but hold it lightly

Do NOT work on the 'today' business full-time - spend 20% of your time on the 'tomorrow' business

I speak as someone who goes overboard on everything - balance isn't one of my strengths (although I'm working on it).

INVESTING FOR LEVERAGE... 80/20 rule...spend 80% of your time on short-term stuff, and 20% on longer-term, 'investing for the future' projects (like businesses that will generate passive income for you, or passions that will create a future network effect, like writing a book).

This 20% might be spent on the next phase of your current company, something that won't bring in money today, but will create an income stream.

Budget time (I set aside Fridays) for investment in longer-term projects, related either to the current business or future ones.

The 20% isn't a cost - it's an investment in your future.

If you're a consultant and live by billable hours, this is EVEN MORE important. Billable hours won't make you financially independent. It's the things you do in that 20% of your time that will.

Set client expectations around this. And if you have clients are unhappy that you aren't available ALL the time to them...then try to find ways to not need them.

PERSPECTIVE: If you do too much of anything it's unhealthy. You lose balance and perspective on what's both important both in the business and in your life.

The oxygen can get thin: look at what happens to people who spend too much time in one camp in politics - they lose all perspective, and become single-minded on their mission.

We end up sacrificing important, long term things (ideas that could generate passive income, health, relationships) for short-term things that you'll have forgotten about next month (more billable hours, a few more product features, a couple more customers...)

Health becomes less of a priority. Family/friends can too.

Healthy Hyperproductivity

GROWTH: Working on multiple, different projects keeps expanding my mind, skills and network; it accelerates my own personal development. When you only do one thing (anything), after awhile you hit a plateau. I'll never plateau!

* Steve Pavline post on multiple interests:

http://www.stevepavlina.com/blog/2008/07/what-if-you-have-many-different-interests-and-cannot-commit-to-any-of-them/

By using PebbleRanking to decide what to work on, even though I work my ass off, I'm always doing very cool stuff. My problem now is that there's too many interesting things that I want to work on.

Make progress in bite-sized chunks / babysteps

Take your big, unfun projects and break off a small chunk to begin with. Think about ways to make it an interesting chunk.

If you're building a complex product, why try to build it all at once? Isn't there one piece or section you can start?

Do it in phases

This is actually a more productive approach: you learn so much along the way, you don't want to try to create everything on day 1. Produce your product/content along the way...it'll be easier, cheaper, and the quality will be much higher.

how to earn your first love dollar

http://www.stevepavlina.com/blog/2008/07/how-to-earn-your-first-love-dollar/

Free your passion: how can you make your work as interesting as possible?

Focus on your strengths and what you enjoy

Prioritize projects in a new way: PebbleRanking

Eliminate/outsource/partner/rethink things that you're weak at or don't enjoy.

Having a business partner/cofounder, someone who complements you, often makes the business easier to enjoy and can be more motivating.

When things hit a rough patch, don't let the business become a burden - it'll dilute your passion and demotivate you. What are the sources of stress, and how can you recreate a healthy situation that lets you focus on enjoying the business? (Which might include taking a break from it).

Make every day interesting (change or let go of non-interesting work)

Klia: "This has given me permission to let collaborative partners come up with the strategic plans for ideas that involve me, but I'm not personally invested in. Previously, I'd spend hours trying to figure it out."

No one wants days which are about going through the motions (and it's demotivating, numbing)

How can you make EVERY DAY interesting to you? Only you can answer this question.

Start with working first on projects that are inherently most interesting to you: PebbleRanking

Find a partner (use the buddy system)

A partner helps with motivation, other perspectives, risk reduction and emotional support (just as a buddy helps with working out, nutrition, or anything)

Find someone who is a great complement to you and your own interests, and who you TRUST completely

A litmus test: would you want to work with this person for 20 years?

[need new title] Try turning down clients / Say "No" to clients

Klia: "Two current clients are not lucrative enough. I'm readying myself to propose a different payment model or, if they don't propose something else worth my time, I'm going to have to drop them."

If they really feel the value in what you're doing, they'll help you come up with something that works for both sides. If they won't give you enough attention to help figure it out...then they might not have been that interested anyway.

notes...ryth...

Be dispassionately passionate

Be totally driven and passionate about a vision of what is possible, an outcome... (Mine: "Change the way 100m people think about work")

But be agnostic about HOW you get there, about what the business model is. (Mine: I vague ideas, but really I have have no idea yet how this will happen yet. However, everything I'm doing is impacted by that vision)

[notes about how business models totally change between what you think they'll be and what they end up being...]

Be patiently aggressive

Be aggressive about making constant progress (even baby steps), but patient for results.

It can take a couple of years to go from 'idea' to 'self-sustaining business'

Although we fool ourselves into thinking otherwise, we can't really control other people, customers...really much of anything. Sometimes you can't even control yourself :)

If you're following your interests and intuition ("right thought") and doing the right things, the right results will come. But you can't predict when.

Give up trying to control when things happen. Let go of time. Take your watch off. It won't help make things happen any sooner, and you'll be much less stressed.

Take the mental energy/attention you would be spending on time, and devote it instead to planting more seeds: clarifying your ideas or exposing more people to them.

Make it easy for customers to try and to buy ("Layers of the Onion")

Rather than trying to sell people on one or two specific programs, offer clients a variety of ways to get to know you

Vary the amount of (mutual) trust and commitment required from each level, and let the client decide what they're comfortable with

By having this tiered system, a prospect can engage right away in a way they choose, and then can work their way up to higher levels of trust & commitment as they get to know you (and as you get to know them).

More info and examples on PebbleStorm: Layers of the Onion

The business will grow on its own (without help from you!) And what to do if it doesn't.

If you're following your passion, making every day interesting, practicing Layers of the Onion...you'll do great work and you'll infect people with your ideas, and they'll tell others.

Trust that word of mouth and other organic processes will bring about a tipping point, within a 6-18 months, in which you'll get plenty of business. Be patient. In the meantime, focus on laying the "Layers of the Onion" groundwork and your 20% projects (for leverage) as the demand grows.

If after 1-2 years the business is NOT growing in some manner on its own through word-of-mouth or other organic means, you're on the wrong track. You might be focused just on making money instead of your passions/unique genius, you might be stressed about something else (which your clients will sense), you're not enjoying it...something. Shake things up and really ask yourself why you're doing this and how you can make it really enjoyable for yourself and clients.

Lighten the load: stay lean and spend less: the less you spend, the easier it'll be to get to self-sufficiency / sustainability

First worry about creating a service that works and a self-sustaining business...before worrying about growing it.

What's your sustainable model? Do you bring in more money per customer than it takes in time or money to find that customer?

If you do more of something that doesn't make money, you'll just lose more.

First community, then business (/ build on your strengths?)

Your community will be your best future source of new clients, employees, advisors and investors.

It's much more efficient to find ways to build a community before you begin offering more and more business services to it.

Building your community doesn't necessarily beging online: it can be through events, friends or email lists

Example: Don Davis is passionate about wine and events. He's worked from his passions and strengths to start a couple of successful businesses already:

- Original passions: Don organized large parties in San Francisco for years (so he already had a community of people who trusted him). Don also worked in wine-related internet companies (like wine.com) for years.
- He then combined the two passions to start "Uncorked Events", a wine tasting events business in San Francisco. Because he already had a trusting events community, the wine tasting events business was immediately successful.
- He then added another layer to the onion, and started "Bin38", a wine bar in San Francisco. Again, because he already had a trusting wine and events community, it's been successful very quickly! Instead of building the customer base from scratch, he's been evolving his community and adding more layers of services to it.
Because Don spent years building a community before he started these businesses, he was already prepared to be successful.

Focus on your unique genius - be yourself, be authentic

By focusing on yourself and your interests first, your 'voice' and personality and passion will more readily infuse the business.
Your Unique Genius will make you more successful and make it easier for others to find you (thank you, Internet!)
Get feedback, but don't do things that go against your intuition or interests - don't dilute your passion or voice with boring, plain marketing-speak.

Do more with what you have first (before worrying about doing entirely new things)

What are your current passions? Current assets, products, technologies...?
What can you do with the people you already know?
Leverage the people you're already working with for help.
- Klia Bassing (www.visityourself.com) has a meditation business with six teachers. They let companies offer meditation classes in the workplace. She needs some ideas on finding more clients. Instead of trying to solve this on her own or bring in strangers, why not ask the teachers if they have any ideas on how to expose more people to the benefits of meditation? (Which is more aligned with their passions than 'how can we find more clients?')
- Also, at least one of the teachers might be inherently interested in the idea, and might want to proactively help!
Find customers, employees and partners through people you already know
- Focus on the people you already know to find new associates
  - Friends, family, networks...
  - Which customers or partners would want to work with you?

Grow your own
- Grow junior employees into senior employees
- Grow senior employees into partners
- Let people try new things within the business - let them follow their own interests

Rally your extended team around common passions

Work as much as you can with people and partners who are also passionate about the ideas or meaning behind your business

- For example: if you want to open a dog care boutique, can you find a great location that's owned by another dog lover?
- Or an interior designer or building contractor who are dog lovers?
You'll get better service from them, have more fun, and have a jumpstart on building your community!
When hiring employees: if they're more excited by the money or perks than the idea behind the business...you'll have trouble in the future with them.

Align yourself and your employees/partners behind the vision or meaning of the business
- For example, if you have a meditation business and want to get some help from coworkers on increasing your customers..."How can we expose more people to the benefits of meditation?" is a much more empowering goal than "How can we get more customers?"

Be good

"Be good" - people can 'do good' without having a positive intention behind it (such as donating money to a charity just to get your name on a building).
Don't just do good - be good.
Not only will it feel better to you to do good and live and work by positive values, being good
- It will feel better to the clients you want to draw, and
- Will help your service spread by word-of-mouth.
Frictionless Karma
Trust is THE most important thing you can maintain. Both
- Trust in yourself, and
- Trust between you and your clients.

Be long-term greedy

The MOST important factor in your long-term success is delivering a great service to customers, who trust you, and will then talk about you with others.
Overdeliver on customer expectations
Don't be afraid of charging more money if the service is worth it. You don't want to offer it too cheaply, or make it too expensive. People charge too little more often than they charge too much.

Build trust in yourself

Your biggest critic will be...You. "I'm not doing enough, I'm not fast enough, will it work? what am I missing?"...etc

If you distrust yourself and your idea, why should potential clients or employees trust you?

The fact is, if you're making any kind of progress...even baby steps...you're doing great. Just keep any kind of forward momentum, and let it build over time.
Build trust by putting yourself in a situation where you can focus on your strengths and what you like to do, and you've eliminated/partnered/outsourced your weaknesses.
Focus on a succession of daily small wins and accomplishments will build trust...bite-sized chunks!
A FANTASTIC book, one of the few that changed the way I look at the world: The Four Agreements (on Amazon)
- Summary: Four Agreements Snapshot

Get feedback, but trust your yourself / your intuition first

By all means, talk to all kinds of people about your passions and ideas!
Get feedback on them - what do they think? What would they change?
Appreciate their feedback, but don't follow it verbatim. What feels right to you? What keeps the business true to your passions, values and interests?
For example, let's say that you hate the idea of manipulating people. if someone tells you to market a product or sell it in a way that you think is manipulative, even if that person is sure it'll bring in more money, don't do it.
While the business is taking shape (which can take 1-2 years), you'll be in "receive" mode much of the time, getting all kinds of ideas from people. At some point(s), you'll get sick of all the input, and want to shut people out. Great! Just start ignoring people and focusing on what you think will work. Buy earplugs if you have to.

Build as little from scratch as possible (hopefully nothing...)

I'll probably have to write about this another time...here are some notes to self -
If you wait long enough, someone will build what you need for you.
Old energy: you wanted to own and control EVERYTHING.
But owning/controlling things requires management and maintenance. The more we have to control and maintain, the less energy we have left for our passions (or taking our interests to the next level).
New energy: own/control NOTHING (or as close to it as possible)...except the pieces related to what inspires your passions and creates and maintains trusting relationships.
In the world of web services and outsourcing, other people will do ___ function better and cheaper than you. Let them, so you can focus on your strengths.
- Examples for etailers: shipwire, amazon...

Do less

Don't grow for growth's sake
Everyone tries to do too much - and it overloads and kills them! It takes the joy out of work.
What if you just didn't do [___]?

Don't add features or services just because people ask you to
Don't take on new clients just because they want to hire you
Are you overloaded? Just do less.
Pace yourself
Stay smaller. Avoid hiring people if you can - is there a way to rethink the work or come up with a new solution so that you don't need to hire someone?

Leap and the Net Will Appear

- Success first starts with commitment, and the rest will follow

Patience, patience, patience

part of this is the value of patience patience patience, because you can't see your own gold as you create it. you need some distance from yourself, and time gives you that.

Paul Graham's "13 Sentences"

http://www.paulgraham.com/13sentences.html

Tim Ferriss post on increasing profitability:

http://www.fourhourworkweek.com/blog/2008/06/24/the-margin-manifesto-11-tenets-for-reaching-or-doubling-profitability-in-3-months/

Have some ideas or stories? Feel free to add them into this main page itself (and put your name by them), or email me or go to:

Personal Stories and Suggestions on the Bootstrapping Guide