Lie, Cheat and Steal - getting started

If start-up founders are the rebels of the business world, the ones that dare to think differently, then I always think that among founders there is another subdivision. The founders who work with VCs and seed money are in my opinion the more traditional, ‘corporate’ type of founder whereas the bootstrappers are the true freewheeling buccaneers- the rebels’ rebels.

When you start your bootstrapping journey you need a subversive mindset - a willingness to at least bend the rules, if not break them, in your quest to get yourself up and running. Before you even start you must build yourself a runway. A runway is the amount of time you can survive before your start up needs to become financially viable. People only launch businesses in an optimistic frame of mind but, when working out your runway, it’s prudent to try and calculate how long you think it will take to get going and then double it.

There are different ways to fund it. You can move to cheaper accommodation to get your costs down. You can scrimp and save in the lead up as much as possible. You can apply for credit while you still have a salaried job (if you do). I did all three. I figured that there was no way a bank was going to give me credit for my start up or once I’d left my salaried job so before I left I applied for every credit card I could. Armed with three credit cards from this, a cheaper flat to rent and six months savings I figured I could last just over 12 months but thought it would only take 6. In the end it took 14 but I managed to stretch my meagre finances.

Once you’ve got your runway you need to get out the door and talking to prospects. The first impression and how you present is important, especially if you’re in the b2b world. Naming the company after yourself may be great for your ego but its usually a terrible idea. If you’re successful then, when you eventually come to sell, any buyer will apply a significant discount to offset the risk of how much of the business is tied up in your name.

It also signals that you’re a startup. This means that you represent risk to any buyer. What happens if after they’ve bought your product or services you decide to give up, or you get ill and can’t work, or you decide to change the businesses direction or many other reasonable concerns. As well as the risks working with you brings, they will also know that they can get a better price as it’s just you, so they can drive the price down and they will. If you agree you can then spend a significant amount of time later trying to drive the value back up. It’s the same perception issue with job titles.

If you title yourself as the founder and CEO then it’s clearly a startup. This can cause a headache selling certain types of products. When we started RFi I was the business development director and my partner was the research director. We kept these job titles for the first five years. With both of us being English but now living in Australia we decided to create the narrative that we were setting up the Australian arm of a large UK agency. We figured that this would help soothe any buyer nerves as they would then think we were well established. While never explicitly putting anything in writing we definitely worked this impression. We even had an imaginary boss in the UK who refused to let us discount on our pricing when they asked. All of this was to overcome the perception that buying from us was a risk.  We were established, there was a team behind us, our pricing wasn’t up for discount.

When one of our first clients announced they were going to visit our office in person there was an initial panic. We had given the impression that we were a thriving agency with a team of 10-20 people not just two people with two young graduate trainees. We had to get creative and I directly stole an idea from another start up I’d heard about. We needed a makeover.

I asked the client to come at lunchtime. We then persuaded our next-door neighbours to lend us their office in return for some drinks at the local bar. We then also took over both the other office rooms next to us which were fortuitously empty. We all brought in any spare jackets which we threw over chairs, old laptops, some old second-hand desktops and screens I got cheaply, mugs full of coffee, half empty water bottles, etc. By the time we finished it look like we had a team of twenty spread across four office rooms, most of whom just happened to be out at lunch. We had our meeting and the client left with the impression intact that we were a thriving, well-staffed agency.

While this may all sound like a form of lunacy it had a point. We needed our clients to trust us and for that they had to think we were established and well-staffed.

As well as stealing this idea I shamelessly stole lots of other ideas and highly recommend it. You don’t have to be completely original. Whether it’s a product feature, an idea for your culture, a sales campaign, a marketing idea -it doesn’t matter. Chances are you’ve had previous jobs so what did you like? What worked elsewhere? Feel free to let your thinking be influenced by what you like and know works. Our product idea was essentially a blend of various different things we’d seen elsewhere which we thought were cool, all mixed together, blended and then out popped our new product. I should point out it took 14 months to work out how to blend it correctly but you get the idea.

 Silicon Val

ley talks about faking it ‘til you make it and there have been some seriously fraudulent examples of that so let’s be clear, with the title – Lie, cheat and  steal-  it’s tongue in cheek. But you’re bootstrapping now and you need to get creative and subversive, to challenge the status quo and, if necessary, slightly bend the rules to work out how to make it work.