Keeping the dream alive - bootstrap your way out of the death spiral

Keeping the dream alive - bootstrap your way out of the death spiral

Summary: Jennifer Leggio is on the road.Guest editorial by Ryan KuderI was very publicly laid off from Yahoo!


Jennifer Leggio is on the road.

Guest editorial by Ryan Kuder

Keeping the dream alive - bootstrap your way out of the death spiralI was very publicly laid off from Yahoo! back in February. It’s a gut-wrenching experience for anyone who has gone through it. At the time, my choices were to get a new job, try my hand at consulting, or start the company that I always wanted to start. I chose to build a company.

Unfortunately, the past few weeks haven’t been the greatest time to be an entrepreneur. TechCrunch is calling it the death of Web 2.0. Jason Calacanis wrote about (The) Startup Depression. The VCs are circling the wagons. The Angels are harkening back to the last bubble. There’s some optimism coming from a few people like Brad Feld, but most of their focus is on startups who have a round in the bank and need to conserve their cash.

I am not one of those startups.

Typically, entrepreneurs will work their idea at night and on the weekends while they slog through the 9-5 shift. But when there is no 9-5 and money stops flowing, there’s a sense of panic that steps in. There’s the “Oh Shit” moment when you realize that the dream may die well before you intended. You can abandon the dream, or you can bootstrap it.

We’re going to keep chasing the dream. Here are the five things that we’re doing to bootstrap our startup and keep the dream alive.

Refigure everything You need to assume that it’s now going to take you twice as long and cost you twice as much as your craziest outside prediction. When you bootstrap, your startup takes a backseat. It’s a necessity. With your focus and your money diverted, you lose the economies that you’d have if you were working on it full time. Make your best guess as to how long it will take and how much it will cost you, then throw it all out the window.

Reprioritize It’s critical to get to market as fast as you can to start pulling in revenue. Figure out what you need to launch and cut everything else. You won’t have the resources to build everything you want. Take a look at your feature set and for each feature you have on your list, decide if your product would still be usable without it. If yes, cut it. Repeat.

Next: Network, network, network... -->

Cut back to the bare minimum We’re doing this from a business perspective, but also from a personal perspective. This is especially tough if you’re married with kids and a mortgage. The key to surviving a bootstrap period is to get by on as little as possible. Your income is going to take a huge hit and the things you thought were necessities will become luxuries. We don’t eat out anymore. My wife’s birthday party was BYOB. She used to get a monthly pedicure -- no more. (My wife is awesome, by the way). Take a hard look at your budget and if you don’t need it, get rid of it. Your primary objective here is to make the money you have last as long as possible.

Network, network, network One of the best things that happened to me after I left Yahoo! was that I met a ton of people. And as more people left Yahoo!, my network expanded in all kinds of ways. The people you know and the people you meet along the way will be able to help you. It’s imperative to stay in touch and let people know what you’re up to. If you’re not already, start blogging, Twittering, Facebooking, FriendFeeding and LinkedIn-ing (is that a word?) so your friends, family, colleagues and potential contacts know what you’re doing. Now is not the time to be shy.

Stay in your field You’re going to need to find other sources of income. Consulting is a great way to bring in some extra cash, but try to keep your scope of work related to your startup. You developed your business because you’ve got a skill set in an industry -- leverage that. Our startup is in the local space. While we ride this out, I’m helping local small businesses learn how to use the internet to improve their business and cut costs. Not only does this keep me up to date on what’s happening in my industry, it’s also building my network, helping us get an even better understanding of our target market’s needs and developing potential customers for when we’re able to launch. We’re also actively seeking projects for our off shore developers to help cover our costs.

Keep the dream alive Don’t quit. You may have to delay things for a while, but keep reminding yourself why you started your company in the first place. You believe that you have an idea that will create value for your customers. That hasn’t changed. You may need to adjust your strategy or your product or your timing, but what was fundamentally true a few weeks ago is still true today. There’s an old saying that it’s always darkest just before the dawn. Nobody knows when, but the dawn will come.

There’s no right or wrong way to bootstrap a startup. And the economy certainly isn’t making it any easier. But it’s definitely doable. What are you doing to keep your dream alive?

Ryan Kuder is a former Yahoo! and is now the founder and CEO of the pre-launch startup Neighborsville. To get by, he’s helping small businesses understand how to use the Internet to build business, cut costs, and develop customer relationships and leveraging his offshore development team to pick up extra development work. You can reach him at

Topics: Social Enterprise, Networking

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  • Great post Ryan

    As someone who got layed off in not quite as public a manner as you but at the same time I can relate! My own search for funding hit a wall when our prime prospect visited us in Detroit and got totally depressed about the real estate market. I think he may have made some wise moves when he got back to Austalia! One of them was not investing in us.

    So, I swore off entrepreneurism. Don't get me wrong. I am not giving up on the thinking, changing the world stuff. I am just not going to pursue startups that take five years to build and grow and leave you with nothing at all. I am focussing on doing what I know best. Getting clients for my consulting services, and building a killer blog, all things that generate revenue.

    Good luck and let me know if I can help your efforts in any way.

  • RE: Keeping the dream alive - bootstrap your way out of the death spiral

    Full disclosure: I worked for Ryan as an MBA intern at Yahoo! back in summer '06, and I'd follow him into a ditch (where he would proceed to convince me of the merits of being in the ditch).

    He and I are going through eerily similar experiences, ie, running broke pre-launch startups (love that term - better that my term thus far: stillborn). I should say, I don't have the kids, wife and mortgage issue, so HUGE bigup to Ryan for fighting on!

    Ryan and I talked about the panic recently, and Ryan, your post just re-fired me up. I agree with everything, especially that the best part of the process has been meeting so many great people. And yes, I'm trying to land digital media consulting gigs right now to keep the dream alive.

    Respectfully yours,
  • Suck it up kid!

    First of was YOUR choice to recount your trials and tribulations on the web for the world to read, if anyone was remotely interested, so don't feel sorry for yourself.

    Secondly...I had TWO airlines go belly up on me 17 & 12 years ago respectively, that I had spent over 25 years working for.

    I mortgaged my house to pay for retraining myself, got several technical degrees/certifications...then spent TEN YEARS trying to get hired in the IT field.

    I started my own IT consulting firm, which was only marginally successful over a nine year period due to stiff competition in my area, because no one would hire me for two very opposite reasons:

    1) I did not have any documentable long term IT experience, even though I had been building & maintaining computers ???on the side??? for years...or

    2) I had the certs people were looking for, but they wouldn't hire me for an entry level position BECAUSE of the certs...even though I knew, and told prospective employers so, that I had to start at the bottom and work my way up the food chain. Something MOST people under 50 these days are not willing to even consider.

    Can you say "Catch-22"? (If you're not old enough to know what that implies...stop reading now.)

    But it did finally lead to current my position as a Net Admin for a major East coast university.

    So, if it takes longer than you think it should to get your feet back on the ground???deal with it. That???s life.
  • RE: Keeping the dream alive - bootstrap your way out of the death spiral

    I know how you feel, because I'm in the same boat. I too worked for a big web company and used to make a six digit salary. Now, the company is not interested in me, because the internet has changed and people aren't into the things they used to be into. Unfortunately one of those things is what I'm best at doing and the only thing I want to do.

    So I'm continuing to follow my heart. I've started two websites and neither are hugely successful and are so time consuming to keep up. And it's frustrating not having money to put into them. But I'm not about to give up.

    I hope you're right that the dawn will come.

    Thanks for your article and best of luck to you. I hope your business is a huge success.