My first funded startup, in 1978 at age 25, was anything but lean. The term startup was pejorative in that era, and it was necessary to show substance. That cost a lot and I raised USD 1.3 million (4.9 million in 2015 dollars). It took 90 days to order each single user desk computer such as the one pictured – the then revolutionary HP250, priced at over USD 25,000 (95,000 in 2015). We even had to wear suits. The acceptance for trial and error was nil. You didn’t put beta software out there for everyone to try.
The prevailing approach in that era and the subsequent early stage VC backed era led to a lot of now seemingly unnecessary losses. Times have changed for the better. Now, with very little money, you can develop business models, validate them and quickly iterate with customers with rapid piloting of the product and service, something I’ve pioneered since the early 1990’s.
As a leading example of the imperatives at work in the web-based software and app industry, the 2010 book ReWork by Jason Fried and team at 37Signals.com, now Basecamp.com, communicated a number of best practices for a software company that was committed to continued innovation and continued reinvention and focus. The company maintained a very small, lean team, and yet achieved great market success. Their approach gained mindshare. The die was cast and spread beyond software startups.
Bootstrapping is a mindset of resourcefulness and sustainability. Even inside a large company or with lots of capital backing, the mindset is valuable during all the phases of rapid piloting with customers. It’s only once the business model is proven, that bootstrapping loses its edge and the capital to scale becomes necessary. The early 2000’s book Bootstrapping Your Business (second edition 2007) by Greg Gianforte, founder of RightNow Technologies (acquired by Oracle in 2011 for USD 1.5 billion), does a great job of showing how to get your ideas in front of customers for validation well before you spend and typically waste the big bucks.
Every significant business today and every scale customer value proposition is enabled by software. The Lean Startup Methodology, based on the book by the same name. is directly applicable to the software portions and in most cases just as applicable to other aspects of process design and evolution. It’s worth a close study. Click on this line to watch a 7 minute Storyboard of The Lean Startup Introduction in a new tab.