#133 | The 'main thing' when bootstrapped
Live poor, get customers, and only then build
As long as you want power, you can't have it. The minute you don't want power, you'll have more than you ever dreamed possible.
― Ram Dass
If you don't like what you're doing, you can always pick up your needle and move to another groove.
— Timothy Leary
In McLeod Ganj, over a cup of jasmine tea grown far below us in the Kangra Valley, I was told a story about suffering. An aged Indian man falls down a flight of stairs. As he hits each step, he feels pain. That pain — suffering — forces him to think of the "other", of the "beyond", the "oneness". Eventually, he reaches the bottom of the staircase, and rather than feeling delighted, he's sad. He's arrived at the end of the journey.
This story is about life, though it's equally applicable to starting a business. The impact of each stair is discomforting, but paradoxically, I'll be sad to reach the end of the staircase altogether.
We hear advice when bouncing down the old man's staircase in startup-land. The advice? To become and remain focussed. It sounds simple, but like all simple things, it's often unheeded. Without consistent focus, we plummet between the boat and the harbour wall. We ride two horses and then fall from both. Alarmingly, Yokeru has two products (although this is down from six, lol!). Still, it's too many. The advice often said and less often followed, is
"The main thing is to keep the main thing the main thing."
Henry Ford may have coined the phrase, but it was made famous (to tech bros, at least) in Stephen Covey's 7 Habits of Highly Effective People, which I haven't read. Jim Barksdale, the COO of Fedex, repeated it. The phrase asks us to identify a "main thing" and prioritise it ruthlessly. My most successful founder friends continually simplify their message, refining the main thing. In doing so, their team, investors and customers know what they are selling, funding and buying. This clarity, which does not appear through laziness, allows the magic of compounding to occur.
Without a focus, however, a founding team changes direction continually. Changing direction empties the wind from the proverbial sails. There is a peculiar staggering motion (as if drunk on ego, perhaps). This problem is acute pre-product market fit, particularly when you're bootstrapped.
Bootstrapping
Raising money creates accountability. Not only is the plan vetted at the outset by investors who most probably turn you down, but once the plan is set (the mission cemented into pitch decks, the TAM screwed into the wall, revenue targets laid brick by brick), the founders are less likely to deviate from the plan. They can't quite so quickly move on to the next shiny thing.
Bootstrapped (self-funded) businesses have yet to prepare a pitch deck for investors. They have yet to get scrutinised on their plan. There is less glue holding the founders back from flirting with new ideas. So they flirt (like we have repeatedly). In doing so, the open questions which inevitably exist with the extant model (such as: why are sales slow, why is utilisation low, who are the next ten customers, etc.) are ignored.
The point is that without raising money, we are vulnerable to self-deception. Again, the advice becomes pertinent: "The main thing is to keep the main thing the main thing"
What's the main thing?
But the quote begs a question. How do I know what the main thing is? Knowing which main thing to focus on is challenging when you're pre-product-market fit. There are many things to do, but most of them are wrong to do at this moment. On reflection, this is the order I now recommend:
1. Stay solvent
The absolute worst thing that can happen is to run out of money. Therefore this is the bottom of the pyramid if we consider a hierarchy of needs. From then, all things can follow. The first is ensuring the monthly cash burn is as low as possible. There is no need for a marketing team (we made this mistake) or an expensive office. Be super conservative; it's impossible to know when the first revenue will arrive.
2. Get customers
The next main thing is to get customers. Growth solves all business and, frankly, interpersonal problems. It fills the empty void within each of us (my therapist says it shouldn't, but I can confirm it does).
The product needn't be finished or work particularly well at this stage. I wouldn't worry too much about the utilisation of the product at the outset. Without hearing from customers directly, building something useful is impossible. It's been hard in the local authority / public sector space to get enough signal to develop something valuable. But from a concept and a rudimentary MVP, it should be possible to secure paying users. I'm no graphic designer, and our first subscription customer was secured with a demo created on google sheets.
3. Build a great product
Counterintuitively, only now should we focus on building a great product. I accept that low utilisation is a big problem. Even so, if you've approached things in this order should be expected. Then, once you have users, the main thing is to solve the inescapable utilisation problem so they don't churn.
At the outset, we made sales without having a great product. We accidentally had revenue, but it was both lumpy and certain to churn soon. Knowing this stressed me out. Only recently, after a year of one contract, did we change the product so it was used sufficiently. One change took us from 15%-20% to nearly 100% utilisation. You'd be amazed about how patient customers are, so long as they appear to be busy trying to solve the problem they face.
The main thing
The main thing does change. We worried too much about building a great product early on. We should have approached the market in reverse (as I've written here) and not lost sleep from not being polished at the outset.
Bootstrapped startups are in a uniquely horrible position. Without investor validation or runway, it's easy to get distracted. (I constantly do). But it seems more straightforward once we realise we must start by living poor, get customers, and only then build a mega product. Only then can we continue to fall inelegantly down the staircase.
My week in books
I’m offline for a fortnight in Sweden. While meditating I’ll be introspecting my lower back pain as I struggle to cross my legs. Lucky me, undoubtedly, but no books!
Live well,
Hector
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Or stock to your knittingx
Lovely clearly written letter. Enjoy your meditation x