Information Technology Dark Side

Struggles of a Self-Taught Coder

Information Technology Dark Side header image 2

How to Sink Your Bootstrapped Startup #1: The Premature “Big Picture” Pivot

January 30th, 2012 · 11 Comments

What’s a bootstrapped startup
Bootstrapped startups are a version of the lean startup with a 37-signals-esque twist, i.e a lean bootstrap. The goal of a lean bootstrap is to run in the black as early as possible, preferably from day 1. Boostrappers don’t need or want outside capital for the most part, and they are always conscious of the need to validate that they can actually make money doing whatever they are doing.

Basically, if you (metaphorically) placed Rework and The Lean Startup in a blender, turned it to high, then ran the puree through a mumbo-jumbo filter (basically the last 1/3 of The Lean Startup would get removed), the remaining juice would be called “The Lean Bootstrap”.

I’ll let you read those books yourself – I just wanted to introduce the idea so I could then tell you how to sink it.

Lean Bootstraps are Hard to Sink
I’ve been running a lean bootstrap for about four years now called TroopTrack.com. I’ve made pretty much every mistake possible you could make and still be able to qualify for the moniker of “lean bootstrap”. I’ve blown big sales. I’ve blown small sales. I’ve blown really, really big sales. I’ve made bad partnerships. I’ve ignored my customers (unintentionally). I’ve had failed marketing experiments. I’ve gotten distracted by crazy ideas. I’ve gotten so sick that I couldn’t work on it for several months.

Somehow TroopTrack.com survived all that. And I learned from it, and the cumulative effect of all these “mistakes” is that I have a vision for my product that my customers are excited about. Finally.

The point is, a lean bootstrap is hard to sink. As long as you don’t go into debt, give up, make huge commitments that you can’t fulfill on a part-time basis, get sued, or run in the red for extended periods of time, you can keep working on a lean bootstrap for as long as it takes.

A Premature “Big Picture” Pivot Is Your Lean Bootstrap’s Iceberg

A big picture pivot is a pivot designed to expand the “small-time thinking” of your lean bootstrap into an enormous market, usually by making the product more universal

In TroopTrack terms, a big picture pivot might be pivoting from Boy Scout Troops and Packs to all youth organizations from soccer teams to student councils. Or to the military. This type of pivot is tempting because your potential market just went from cute and cuddly to super-model hot.

Resistance is not futile. Giving in to this kind of temptation at the wrong time will sink your lean bootstrap, for the following reasons:

  1. You will lose focus on the problem you are trying to solve before you ever solve it. If you haven’t learned what you need to learn to succeed in a small market, you don’t have what it takes to succeed in a large market.
  2. You will alienate the customers you already have – when you transition from trying to feed a village to trying to solve world hunger, the villages you leave behind will not be happy with you.
  3. You will convince yourself that you need outside investment. Outside investment can be incredibly limiting. It comes with deadlines, burn rates, and other obligations and expectations. Raising money for a big effort can be a full-time job, which will only further exacerbate the problems mentioned above.

The big picture pivot is a big deal, and it can have a huge return, but it needs to happen at the right time. Don’t sink your lean bootstrap by doing it too early.

Make Big Picture Pivots in Small Steps
When your product is successful and you are making your customers happy, big picture pivot opportunities come out of the woodworks uninvited, only they don’t look like big picture pivots on the surface. For example, I recently got an email from someone who had heard about TroopTrack and was wondering if it supported Girl Scouts (it doesn’t). Supporting Girl Scout advancement is definitely on the TroopTrack radar, and we’re actively researching it right now. And a “early adopter” just popped out of nowhere, just like that.

Adding yet another type of scouting organization to TroopTrack isn’t exactly a big picture pivot, but it’s a step towards one. Every time I add a new type of organization to TroopTrack it gets easier to do. It’s also something I can do without outside investment, without running in the red, and without alienating my customer base. It also will give me greater insight into what my customers find valuable about TroopTrack that will help me on my way.

Big Picture Pivots are Just Crystal Ball Gazing Anyway
Creative lean bootstrappers are visionaries. They see possibilities that are endless. They aren’t bothered by the flying pigs in their grand dreams or the snowball fights in Hell. This is something that is totally awesome about being a lean bootstrapper – you can see the potential.

But let’s face it – big picture pivots are an extrapolation into the future based on a myriad of assumptions. You can’t make the leap straight to the big picture without testing all the assumptions along the way. You’ve got to start with the little picture, solve it’s problem, and then move on.

When Should You Make the Big Picture Pivot?
Don’t worry so much about this. As one of my favorite former bosses, Mike Herrick, now of Urban Airship fame, likes to say, “Do good things and good things will happen.” Build a compelling product in the space you are focused on and the marketplace will tell you when to pivot. If you solve your problem really, really well, and make money doing it, early adopters will drag you into the next market when the time is right.

If you enjoyed this post, make sure you subscribe to my RSS feed!
Stumble it!

Tags: Uncategorized

11 responses so far ↓

  • 1 Joshua Fialkoff // Jan 30, 2012 at 9:43 pm

    I have many times been distracted by shiny objects, and I agree with you that we can’t allow these ideas to distract us from our core focus. In the cases where you find the idea too good to pass up, however, you can still keep it lean as you pursue that new idea. For example, pitch your idea to potential customers who might be willing to fund the development in exchange for a perennial license. Using this method, you can simultaneously validate and fund your idea. This is definitely not in conflict with what you said here, just an interesting small step to take towards a bigger one.

  • 2 David Christiansen // Jan 30, 2012 at 10:01 pm

    Totes magotes. If you can pull it off it’s a great idea.

  • 3 Venkat // Feb 3, 2012 at 2:45 am

    I’ve been thinking along the same lines but have come to slightly different conclusions.

    The Lean Startup is built for raw thrust and visibility of certain management elements to investors with certain growth and coarse control expectations. The pivot is an example of the sort of concept that results.

    What you describe later (waiting for your opening, small pivots, creating an opening) is not pivoting at all, but something much more subtle and sophisticated: they are cousins of maneuver warfare concepts from Boydian OODA loop models.

    When you reduce that to a somewhat simplistic idea of a pivot, as an element of a build-test-fail-pivot-build loop, you lose the sophistication but give the investors crude controls to play with.

    The key tradeoff in lean vs. bootstrap is basically higher max thrust vs. better maneuverability. The market dictates which end of the tradeoff is smarter for a given business opportunity. OODA types talk of “inside the tempo” vs. “faster op-tempo.” Bootstrapping is about getting inside the tempo of a market. Lean is about a faster raw op-tempo. Just because you are iterating faster does NOT mean you are generating market intelligence faster. That’s a key fallacy Lean Startup models encourage. Sometimes you have to go slower to generate intelligence faster. “Inside the tempo” is about generating both intelligence and a position to exploit it, faster. After all lions stalk and crouch and wait 10x more than they race, chase and pounce.

    This means blending the two is probably a bad idea. You’re more likely to get the worst of both worlds than the best. It shows in your post. You’re trying to express a more sophisticated approach to agility within a less sophisticated model of agility., without gaining raw thrust to justify it.

    Bottomline: if you don’t have or want external investors, Lean is probably costing you more than it is delivering.

  • 4 David Christiansen // Feb 3, 2012 at 8:17 am

    Deep thoughts Venkat, and well written. I appreciate that a lot. I’m going to have to think about this – I don’t have a lot of theoretical knowledge on these topics, but I live and breathe startups and bootstraps every day, as a founder and as a programmer working for founders.

    Bootstrapping really does force you to go slower, because the amount you can invest in an opportunity is balanced against the immediate return of your cumulative investments. This clearly limits how much you can do. If you are the founder and the developer, things improve a bit because you can pretty much ignore the cost of your time. For example, my best estimate is that I have invested about $400,000 of my life into TroopTrack at this point, but because I love doing it I don’t have to include that investment when I evaluate its profitability, at least not yet.

    For the last year I have been trying to expand my customer base from early adopters to mainstream users. The early adopters helped me figure out what functionality I need, and now I am deep in the throes of trying to figure out how to make that functionality easy to use and appealing to the less tech savvy. It entails a massive redesign of the site that is a huge effort. Would you consider that a pivot, or just a long series of the small changes you mention above?

    Also, isn’t the concept of validated learning useful even in a bootstrap?

    And, why is lean only applicable to companies that want external investors? Aren’t some of the controls useful to the founder of a bootstrap too? Or does the fact that a bootstrap has an infinitely long runway mean those controls don’t matter as much?

  • 5 Venkat // Feb 3, 2012 at 1:18 pm

    I had an interesting discussion on validated learning with a reader on one of my blogs. I made the point in the comments rather than in the blog itself, but you may find it useful. It’s basically the same thing: a richer thing shoe-horned into a more limited construct for a specific tradeoff.

    http://www.tempobook.com/2012/01/19/steer-ready-fire/#comment-3007

  • 6 Venkat // Feb 3, 2012 at 5:21 pm

    Your other points: am working on blog posts about many of them. My basic point is that the unique new ideas in Lean have been overstated, and the scope and degree of their effectiveness has been oversold. So I prefer to go back to the more general first principles from which Lean is derived, and derive separate models for bootstrapping or large companies, etc. The specific derived model is tailored to the needs of VC-driven models.

  • 7 Chris Ames // Feb 9, 2012 at 3:06 pm

    David:

    Loved your thoughts posted on the SvN blog. Also, the term “Lean Bootstrap” is brill. We’re doing it at 8BIT (http://8bit.io). We don’t know what it’s like to NOT run in the black.

    Keep up the excellent writing.

  • 8 David Christiansen // Feb 9, 2012 at 3:17 pm

    Thanks Chris – it’s been a fun series to write. I think I’ve got one or two more posts to add to it before I will be done.

    Where in the world are you guys located?

  • 9 John (8BIT) // Feb 10, 2012 at 9:54 am

    my team is doing many of these things… wow, what a fantastic read…!

  • 10 Agile Scout // Feb 10, 2012 at 10:03 am

    right on. Thanks for this. Lean Startups are good and all…. bootstrappin’? the best.

  • 11 Bootstrapping sucks. Everyone should do it. // May 9, 2014 at 9:34 am

    […] The Premature Pivot […]

Leave a Comment