Remember the three-headed dragon

Mercurius is a three headed dragon representing the sun, the moon and mercury- the god of commerce and financial gain. What has this got to do with bootstrapping?

When founders are starting out, as well as working out how much financial runway you need to support you, you also need to figure out what skills you need and how quickly you need them. With investor led businesses you’ll quickly end up with a list as long as your arms and a cost base to match! But you’re bootstrapping…so you need to remember the three-headed dragon.

There are three essential skills to start bootstrapping any business and the first two  are the ability to build a product and the ability to sell it. This cannot be outsourced. If you’re a single founder and you can’t do both of those things then get a co-founder. Founders are often reluctant to bring a co-founder on board as they have to give up a significant chunk of equity. However there are many benefits if you’re careful about who you choose. The first and obvious one is plugging a skill set gap. My co-founder and I had totally different but complementary skills. There was no crossover at all. I sold, built client relationships and built new business. He built and delivered products. There were more subtleties to it than that but fundamentally our roles never mixed.

The second reason is dealing with challenges and roadblocks.  Every single day you will be dealing with challenges, some minor, some major, but you’re ability to function and grow as a start up is simply down to how quickly you can spot and fix problems. On the truism that two heads are better than one, the more brains you have dealing with these daily challenges the better. The divergent skill sets often help as it’s amazing how frequently it is the one who has no experience in a certain area who thinks up a novel but workable solution. The faster you fix stuff in a start up the quicker you grow- its black and white.

The third area is in coping with the mental stress and exhaustion. As I said in blog… most days it will feel like the whole world is against you and is throwing everything including the kitchen sink at you. No life partner’s patience however amazing will want to fully share that but with a co-founder you’ve got someone to share the pain and stress with.  Don’t underestimate how much you will need this. As Winston Churchill said, “When in hell, keep going”

On the question of how many founders I think at least two and maximum four as otherwise it starts to look like you’re forming a band, but whatever works for you.  The temptation is to be 50/50 or 33/33/33 on equity as this seems fair – resist this. Someone has to call the shots. If you don’t have someone who can force a decision, at best you can end up with paralysis, at worst, a nasty round of expensive  lawsuits further down the line.

Sales is key. If you or your co-founders can’t or have never sold be very wary about bootstrapping. You have to sell to put food on the table. However selling when you’re bootstrapping is different to standard product sales. Don’t assume because you or a partner has sold before with a brand behind them and a defined product or service that they can sell in a start up. Selling with no brand behind you and while trying to define a product is very different.  This is good news for those that have never sold as it means you can teach yourself or download videos ( check out the ones we’re launching each day on March 17th) or take courses. There is no such thing as the gift of the gab. Sales is about listening not talking. It’s about psychology. People buy passion so that will help any founder but most importantly sales is about persistence, determination and grit. The best sales people are the one who work the hardest and the smartest.

Sales have to work hand in hand with product so whether it’s a CPO, or a CTO if it’s a tech business, this is the second must have. One of you has to be able to build and design the product. With gen AI you can outsource a lot of the programming but there has to be a CTO guiding them and working hand in hand with the CEO. If it’s not a tech product then an in house CPO is a must have.  Either way you cannot afford to outsource the product design, build and ownership. It must be understood and owned in house.

The final must have function is a CFO. This is one that you want to add as quickly as possible but don’t necessarily need at the very start. In our podcast with @ Taryn she made the point that while you don’t need to be able to build a P&L you do need to know how to drive one. Initially you can use all sorts of tools and apps to track expenses and report on finances but at some point you need a strategic CFO who can avoid cashflow issues and make the role of finance strategic, by supporting and enhancing your growth, as opposed to a separate entity. Gen AI can’t do this yet.

These three roles are all key but they are also expensive to fill.  You need at least two of these to get going. If you don’t want to take on co-founders then there are other options. When it comes to filling the gap there is a growing number of fractional C suite execs that you can tap into. Alternatively, you can form an advisory board of non execs specialising in the areas where you have a gap. The other solution is Mumsnet. I came across this solution while having a chat with another parent in the sandpit in the kids playground at Bondi beach and have tapped into it several times. The issue with fractional execs is that given their area of speciality it’s entirely possible that the other fractional roles that they have are with a potential competitor. Mumsnet is a source of incredibly talented and experienced execs who often just want to work one or two days a week and who don’t have this potential conflict of interest.

Thanks to Gen AI the reasons to take VC money are rapidly diminishing and the ability and reasons to bootstrap are increasing. I don’t think it will be too many years  before the world has its first billion dollar company with just a single employee- the founder. Once the business is established even the CEO might be AI.

But we’re not there yet. 

In the meantime, remember the three headed dog. I absolutely believe you need sales and product when you start and finance as quickly as possible but, between brining on co-founders and the other options I’ve outlined, that shouldn’t stop you starting to bootstrap, so get going!