‘Bootstrapping’ and ‘bootlegging’ are both approaches which involve the development of new initiatives or projects with little or no access to external resources. Bootstrapping – an entrepreneurial approach synonymous with business start-ups – reflects a new business built with no outside financing. Bootlegging commonly refers to projects undertaken within an organisation by individuals or groups with limited reach into company resources; one example being schemes that offer employees a percentage of their working week to pursue pet projects which have no formal funding or support.
Both approaches are about starting something from nothing. They reflect the notion that, despite financial limitation and adversity, cost-effective new initiatives or projects can succeed. Moreover, they demonstrate that such bootstrapped approaches can actually produce more successful outcomes than projects born from extravagance.
The benefits are numerous. Most obviously, limiting resource limits risk, so if a bootstrapped project fails it does not significantly dilute a company’s overall resources. Bootstrapped initiatives are said to spur ingenuity and creativity, by forcing members of a project to be clever and think rather than spend their way through a project. And added emphasis is placed on proving a concept and measuring its real-world effectiveness, rather than investing in a mere forecast of success. Finally, such a prudent approach helps create more self-sustainable, efficient and profitable projects in the long-term. In general, bootstrapping approaches emphasise the virtues of creativity, commitment, prudence and self-sustainable value-creation.
Such a cautious approach is not appropriate for all projects. If for example a project is highly viable or business critical, starving resources could be detrimental to both the project’s success and speed of implementation. Bootstrapping is therefore best suited to non-critical, high risk, or less clearly viable initiatives.
Sow seeds
Either time or money is needed to get a new idea or project off the ground. But that does not mean lots of time or money is always required to deliver results. Dell began with $1,000 in self-funding, Google Mail was the product of letting an employee spend a day a week working on his own personal idea.
Bootstrapping must therefore provide minimal ’seed’ time or money upfront. How much time or cash is provided may be determined by what spare capacity is available, or through making a judgement based on the project’s likely viability and potential long-term resource requirements. Either way, bootstrapping by definition is about keeping things as tight as practicably possible, until a project has proven its worth.
Keep ‘em lean
To achieve a simple and lean approach, there should be an intrinsic focus on gate-keeping resource expenditure and minimising points of waste. Doing this ensures that all cost and time spent delivers maximum business or customer value.
Keeping things lean and free from waste also allows you to channel what remaining resources are available into value-rich activities.
Think different
Limited time and money might drive the need to bootstrap, but the approach argues that such adversity is turned on its head and made into an opportunity to be creative, ingenious and innovative.
This might demand that staff rethink how each function of an initiative is run, looking for innovative, cost-effective or different approaches to strategy, operations or marketing. For example, using cost-effective marketing approaches such as word of mouth or viral marketing instead of expensive tv/radio promotion; or using a placement student to help develop a new process or idea.
Of course, limitation could serve to demotivate and frustrate. It is important therefore not to limit a project to the point that it cripples its ability to grow. If a balanced approach to resourcing, and a creatively-minded culture can come together, a lot can be achieved from little.
Prove the concept
If a new project shows signs of success, it is likely to demand more respect and thus more resource. This means that those pursuing bootstrapped projects must closely measure success and identify where customer or business value is created. Such measures are the project’s lifeline to additional resource, so proving the concept should naturally be a fundamental priority.
It is also important to highlight areas where value-creation might have occurred or been increased had their been additional resource. Bootstrapped projects aim to limit upfront risk and resource, but should also be conscious of when it is a good time to spend more.
Spend more, more wisely
Once a bootstrapped project demonstrates success and defines its own contribution to value creation, it has in large part proved its worth. Whether or not that means additional time or resource is invested is still matter for decision makers, but such a prospect must be a possibility. Bootstrapping is a kind of carrot and stick approach, so if the carrot turns red-herring it could quickly deflate a project.
The option to invest more resource must therefore exist from the beginning. Of course, if a project has truly ‘graduated’ into something which offers clear and demonstrated results, this prospect of further investment may be easier to bear. At such a point you can confidently spend more, more wisely.
From seeds
Some might say that bootstrapping is rudimentary, common-sense stuff – that no project should be devoted vast resources without first proving its worth. And in many ways this critique is fair. But right now, as we depart an era in which for many resource was more accessible than it is now, we might be forgiven for thinking we need more than we actually do. Bootstrapping is really just an amiable and memorable term, which reflects the fact that we can often survive and succeed on less than we realise – if we show some clever thinking and commitment.
Critics might also argue that such approaches could stifle development of projects that would otherwise have been stronger, or that starting too many half-hearted projects will dilute them all. Too many failed customer-facing initiatives could also confuse or irritate the customer. All such criticisms carry merit, and emphasise the fact that bootstrapping is not advisable in every situation. But in other contexts, bootstrapping is about breathing life into projects that may never have begun otherwise; the outside bets, the things you can’t quite afford, the pet projects that need a bit of imagination to make them stand out.
In some ways bootstrapping is more of an attitude than an approach. It demands a cultural shift that fosters an attitude of creativity and prudence over trigger-happy spending. During this time of recession, in which most employees are aware of the restrictions and limitations on many businesses, such an approach might be more accepted, leading to a greater cultural motivation to succeed over adversity. Moreover, many now-multinational businesses started on bootstrapped budgets, some even began and prospered during recession. Indeed, research suggests that recession can be an optimum time to begin new initiatives that are – as a result of adversity – more cost-effective, sustainable and profitable.
Fundamentally, bootstrapping is about pursuing development and growth despite limitations. It is, if you like, the process of pulling oneself up by the bootstraps and simply getting on with it, with a bit of creativity and determination. This is the essence of bootstrapping, and this essence could be just what we need right now.
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