How To Bootstrap
Devin MillerThe Inventive Journey Podcast for Entrepreneurs
How to Bootstrap
The Inventive Journey
Starting and growing a business is a journey. On The Inventive Journey, your host, Devin Miller walks with startups along their different journeys startups take to success (or failure). You also get to hear from featured guests, such as venture firms and angel investors, that provide insight on the paths to a successful inventive journey.
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customer discovery by far but i mean there's processes to ask the questions have conversations with potential customers i mean i'd say that if you if folks spend more time just doing that process of learning their market going through the iterations of having conversations before even before putting a website up even before writing a line of code um there's some great resources out there that i mean i don't know just like worksheets and canvases to fill out and all this kind of stuff that's where i suggest to start i think spend the time there make a gel and then move on to the really heavy [Music] lifting everyone this is devin miller here with another episode of the inventive expert i'm your host evan miller the serial entrepreneur that's grown several startups in the seven and eight figure businesses as well the founder and ceo of miller ip law where we help startups and small businesses with their patents and trademarks if you ever need help with yours just go to strategymeeting.com grab some time with us to chat now today we have another great uh guest on the podcast cart or kirk i was gonna say carton i don't know why curt marple maybe that's because i got all of everything jumbled together kirk marple but hey we're going to talk a lot about uh bootstrapping versus raising money we're going to talk about the different paths to start a business including the money side growing a team how to or how to keep focused some on the technology side maybe a bit with capturing data in other words how to applying insights to that and uh to have a bit of a data-driven uh business so a lot of great uh things that we'll probably hit on and have a great conversation so with that much as an introduction welcome to the podcast kirk yeah thanks so much for having me great to be here again absolutely so now before we dive into the the topic at hand maybe just take a couple minutes and introduce yourself a bit to the audience as to why you have experience in this uh this area and why they should listen to what you have to say well no i mean i think it's uh i mean there's so much i mean thankfully having some gray hair now i've learned a lot over the years and had multiple businesses have a current business right now that just got venture funded this year and it's uh it's been a ride i mean i think there's there's so much learning that you can get from the ups and downs i mean as well as being on the technical side and being on the on the business side as well so awesome well i definitely uh i think it's a a great area to have experience in the area where a lot of a lot of people are going to uh want and look forward to that expertise so with that much as a as a great introduction let's dive into some of the topics at hand so one of the ones that i think that almost all startups or small businesses often face or they all face is you know how are we going to pay for this i have a great idea maybe i want to start a business and i have the desire to do so um now you got to figure out you know what they're how to pay for it or how to get it started or how to do it without having a lot of money and so one of the questions that often comes up is you know kind of bootstrapping versus raising money for those of you maybe not as familiar as you probably are but bootstrapping is kind of where you do it yourself you either put in your own time money and effort but you don't take in any outside investor dollars or outside money and you're just doing it as you're able to or as you go and you're funding it yourself raising money is obviously where you go to a third party they can give it to you as debit or debt or they can give it to you as investment so they give it to you for equity and they're different ways to raise money but how do you kind of start as you're getting going with the business um kind of determining bootstrapping versus raising money or what path to take it's pretty interesting i mean so my first company i had been at microsoft for a number of years um and it was right in the stock market crash of 2000 and so didn't uh kind of got out of that i left microsoft and i wanted to start a company but it was a terrible environment for raising money um so i had uh i mean a little bit on hand and decided look i mean i'm just going to get going with what i have in hand i had a business partner at the time and we decided to just bootstrap it from day one and had some i mean you have to figure out how much runway you have how much you want to pay yourselves um and it was just the two of us at the start and so i mean it's in contrast i mean over the years it's i mean i had that company for about i guess 10 11 years um went through the financial crisis of 2008 um kind of came back around and it started to get a bit easier to raise money and things loosened up and i ended up selling it after i mean about 11 12 years but after i got the itch again i started working for some people um as an executive had the itch again and a lot is just who you know and who you meet so networking um was was hugely important i just didn't have the network really when i first started out i was an engineer um software engineer and i knew engineers i didn't know venture capitalists i didn't know people i'm investors at the time um you kind of i mean i think anybody starting out if i mean as much as coming up with the idea i think it's it's generating the network um generating people that are interested in what you're doing um and i was lucky enough to meet the right people and have enough of a kind of ecosystem around me that when i had an idea um i guess it was almost exactly a year ago i started looking for money for a seed round for and i had actually started writing code several years before that so i had some ip that i had already built and met the right people got a lead investor was able to put together a full seed round and um i mean yeah became venture backed and so it was uh i mean completely different than bootstrapping so now you do that and you know so you kind of have the both sides of the coin bootstrapping on some sense and raising money on the other now if you're to go out and start a let's say you start a new business today how would you go about making the determination hey on this business i should bootstrap this one i should get investor dollars maybe you know how much do i raise or kind of how would you even go about tackling that because i think every business is a bit different you know if you're going out and building a huge technology company that you're gonna have a whole bunch of research and development r d you're gonna have to hire on a team and it's gonna take two or three years to get a product down the market makes it really hard to bootstrap on the other hand if you're going to go or start to sell pencils door-to-door you probably don't you could probably bootstrap that so how do you kind of make that uh weighing or that that determination yeah i mean i come from a software engineering background so i think it's i could already build a lot of it myself and i think that's if you come from that side it's a bit easier where there's nights and weekends and so essentially i i kind of did bootstrap this second company for several years where nights and weekends i would work and write code and kind of build out the concept i even contracted out with some friends to help with the ui um and and some of the design and so i think i think if you're going to raise money you i mean at least in my experience now it seems like you have to have something to show for it just having purely an idea is really hard unless you have the new the next uber or the next airbnb and it's it's a brand new thing that you bring into the market if it's something different and especially i'll just stay in the software realm um the more you can show for it the better even if it's a mock-up even if it's a prototype um i would try and do as much as you can just spend the time nights and weekends get it gelled there's a lot of great resources out there for doing customer discovery and just asking questions of people on linkedin and things like that to know if you're heading in the right trajectory um i think once once you have something to show and can kind of i mean even if it's early just something to um find people on linkedin and say hey i mean what do you think about this um that doesn't cost money i mean you can do a lot without any funding just during the customer discovery phase so i think that would be my big suggestion is do as much of that for free or essentially on on your own dollar um and then once you have something to show for it then it's the right time to trigger okay let me go get some seed money or even some pre-seed money i mean 3 400 500 grand i mean is probably most i mean a couple years salary for most people so that actually um the ability to leave your day job um that's usually the trigger point for people um i actually can i i actually uh contracted for other companies for a while just to pay the bills and then was working on my own stuff in parallel so i would spend the mornings writing code for people and then at nights working on my own stuff and i i think that actually works great no i think that you know the that that definitely makes sense i think the the hard thing is is that people well two things are kind of hard one is people oftentimes get and it's just hey i want to get this going as quick as i can and i don't want to be patient and even though a lot of times it would be better to be patient because you're not going to have to give up as much equity you're going to get a better valuation you're going to be you know and all have better value in the business you're saying but i want to get this now and now sometimes that might be the you know the best way is if it's a very competitive environment you're saying we have a very narrow window and you're going to have to take a bit of a haircut in order to get the investor dollars in but it's going to make up for because you're the first you know have a first mover advantage so speak you know so be it and that that does happen but i think a lot of times patiences can be a better ally if it's saying hey yes if i could maybe if i were to go raise some money i might have to give up half my company or more and i can get it going six months quicker on the other hand i can wait and or do it uh you know x y z hit these milestones be able to have a much greater valuation and then when i do hit or go out for that i'm giving up 20 of the company had a better valuation and i'm able to keep it and probably get more money so i think there is that balance sometimes you're saying hey i just want to keep it all to myself and i'd rather take the time and self-fund it and i'll figure out a way to get it done so i think there's always that option so one of the things you did hit on switching gears just slightly that i think is uh definitely uh interesting to hit on as well was the kind of the customer discovery or getting or getting the insight both on who is your potential customer when you're getting a business up and going but also kind of now once your business is up and going capturing you know customer data you know one of the you know data is kind of always i think the hot buzzword which everybody's wanting to sell data everybody's you know kind of the joke is everybody to sas company or everybody's a data company because that's where you know you use those keywords and it seems like you get a better evaluation um but you know one of the hard things is you know sure you grab grab gather a lot of data if you can find somebody that wants to buy it maybe that's a great setup but most of the time data is only as good as you can get insights from or that is actionable in other words you can get a whole bunch of client and customer data and yet you have no idea what to do with it or you don't you know you have email open rates great now what are they opening are they engaging are they not engaging what does that mean you know oh great we have you know this client our clients are located in these locations or these demographics again without that information what does it mean doesn't provide a lot of insight doesn't provide a lot of value so how do you go about applying you know insights to data or even figuring out which data you should get and then how to figure out what that data means to you it's a great question and i think it's it's it's not easy and i think i mean if if you're coming into this as an engineer or from some other i mean other side of things learning that it's essentially sales it's i mean how do you learn sales how do you learn marketing there's so much reading you can do and just research that doesn't cost money i mean it's it's you don't need funding just to i mean start to figure out how to ask questions properly and things like that and i think i mean the product positioning part and the data for me i mean it's you want to get signal i mean and you want to figure out okay what is what are people reacting to um you start to craft the message is so important um you start to hone in like i had an idea of a company to help um with cloud cost management and so i came up with a little short email and i messaged like 100 people on linkedin and started to be like okay i mean who thought i was crazy who thought this actually sounded good and you start to hone that message of just how do you describe yourself how do you ask questions about this concept um and i mean anybody can do that and it's really just about i mean learning really and it's not even about writing code it's not about i mean building um building a i mean a team yet and but i think once you start to get the signal then you could start diving deeper and then you could start being like okay if we did x y and z would you pay a dollar for it and for me that's the trigger point i mean we may build something cool and as as an engineer it's like it's more sometimes you get caught up in hey this is cool but i don't know if i could sell it and i think becoming a good sales person no matter what field you come from and just thinking about okay what would somebody buy um even before what i mean would they spend a dollar is such a thing i always try and think about um because it some people they like the idea but it's not worth it to them i mean they're gonna lose like maybe it's taking them out of their job or maybe that's what they like that's what they're getting getting paid to do already um or maybe it's just not worth enough to them so there's so much learning that you can do up front that i think helps hone your story no i think that that is that's definitely insightful and then it makes sense so well on a practical sense you know one of the things that i i think is almost circling back to what i said is so you know getting that insight any practical tip so let's say i go and i set up a you know i'm a startup or a small business i'm just getting going i set up a crm because i heard that that's the thing you need to do when you have customers in order to manage them right so that's kind of the convention there's a lot of truth to it and now i have a crm and it gives me my general client information maybe it's their name their address their demographic maybe how much they spend where they're located if i'm lucky it tells me where they came from you know they came from a ads or they came from facebook and that's about it you know on a very basic level you can certainly get more aggressive that's kind of the initial information i get is that enough to actually garner insights from or what insights you should garner or how do i even start as a startup or small business to say i've got to get somewhere i've got to start somewhere i don't know what that is i've got some data should i start with that yeah i mean the way i've been looking at it lately and this is something we're doing actively now is we've been focused on the who and a lot of it the the thing i'm really it's some part is the market segment of what i mean who you're getting signal from but also like what are their titles and what are their levels and could they even buy and and that is i i've actually been looking at like the titles of the people we've been finding like i mean through crm and through i mean people we've been doing train exploration but it's are they vps are they directors or are they kind of line of business users because how you sell to them is going to be completely different and some people are looking at it from a strategic standpoint some people are looking at from a tactical like can you solve my problem so i can get two more hours out of my day and i think that's a that is one of the pieces of data that i've been really focused on is i mean how how you sell matters a lot of who you're talking to and so we've been really focused on trying to segment people um because i mean we've we've actually had some signal from people that are what i call like line of business users um it's they have the problem they understand our solution but also selling into them they may not have budget i mean they may not control the budget um so you have to figure out okay well who's their manager who's so what's the team they're on where's the budget come from and you kind of have to work your way up the chain to really understand who are these people and then and then start to focus on okay well what are those people's titles and those are the kind of people you need to talk to so there's a lot of how do you do that you know you kind of how do you work you know i'm trying to think in the practical plans now i've i've done it enough i probably have a bit more experience probably not the typical person that's getting started out but if i try and take myself back and you know back in time so to speak how do you do that in other words i agree with you we need to get that information but how do you understand that or how do you do that and in other words it doesn't seem there isn't just a guide well you x y maybe there is a guy that's not aware but how do you kind of make sense of that data on a practical you know step-by-step level so to speak yeah i mean i think from a research standpoint i mean it's yeah there's no one big org chart for the world and so um linkedin is great i mean i do a lot of um customer exploration of just following companies looking at who's working there i'm trying to see like what roles they are or do you see even things like zoom info or there's a product called lusha that we've used um so you start to understand how are there how are like okay for say an oil and gas company how are they structured um what kind of teams do they have oh they have an innovation team what are um what are the titles of the people in an innovation team so you really have to learn how the companies are built and then what who are the people that are working there and then look for those patterns and so we essentially do that and then start to sort essentially on okay data engineering manager cio chief data officer and then basically start to say oh look i have a cohort of people now i have 10 chief data officers that all look like they're similar in context we can go talk to them so you try and find these clusters of people that look like common like similar customers and then you can refine the story for that cluster um and i mean a lot of it is just boots on the ground searching linkedin creating spreadsheets um and you don't even have to have a fancy crm for this but it really just comes down to looking for patterns and then crafting emails i mean crafting outbound um discussions i mean it's kind of i mean i'm not a salesman but this is kind of i've learned it through osmosis just kind of how to how to target these cohorts of people no i think that uh that to make sense and you know i think that's the difficulty is there isn't an easy way to there isn't an easy way to just go and you know go and mine the data in other words it does take some more than anything time on task let's dive into what is the data telling us and you know sometimes it's you know the other thing i think you have to to make sure that you have a large enough data set to actually garner any sort of insights in other words if you have cut or customer data from custom five customers or you're just barely getting started out you're probably going to be a bit premature unless there's only 10 customers for your product in the whole world then maybe you've got you know 50 is pretty good but for most of the time you're going to say you know you have to have a reasonable data set to say hey we've got three orders that are in texas or california or that yeah but if you only have five orders it does not mean that all your customers are located there but you can you know so you want to make sure you have a good enough data site and then to your point you know getting those or whether it's linkedin going on facebook doing some research seeing who those are and garnering that data i think can give you a much better direction i was gonna say i mean the the number that i've usually heard is have between 50 and 100 discussions because you need to have that statistical significance to start triangulating or clustering that data and if you can get 50 plus i mean just just chats with people i mean it doesn't even have to be a sales very salesy but just understanding what are their likes what are their dislikes then you can start to cluster things together and that's i mean that's what we're i mean because then you start to then you can start segmenting be like okay these are manufacturing these are in i don't know media entertainment and stuff like that but if you have like three or five you're just i mean it could be all across the board it's really hard to find patterns if you're like sub 10 discussions you've had with potential customers no i agree and yet you know sometimes it's exciting to see those initial customers and it's always kind of fun to to get those orders and usually the first order is always exciting to say hey somebody's willing to pay me for this but you have to i think apply just a bit of patience to say well there it's exciting you also have to give it a bit of time now one of the other things that i think we chatted a bit before as far as now we talk a bit about data is there's a lot of different data and sets you can get email data open rates you can get videos you know do they engage or watch the videos how long do they watch the videos you know you can get content engagement you have a blog you are people reading the blog how far they're reading the blog you can get website website visits you know as far as you know how many people are visiting the website how far do they scroll down you can do heat maps which you're telling people you know where people are clicking in other words there's a lot of different areas that you can get data and so is there any right or wrong or ways that where if you're starting out areas that you should focus on these are the things and i'm sure it's a bit of it depends on your business but kind of any general or guidance or advice as to where you might want to consider looking at as far as the data that are together first of all get the data from the different sources and then to look at those data if you already have a yeah i think there's two sides of it i mean we kind of look at it there's the marketing website and you have your product i mean if it's a web-based like typical sas kind of product today the marketing website we're really focused on just capturing emails i mean just finding people that are interested it's really about just that's developing that community because once you know their email you can pretty much learn about anybody i mean if it's a business email or a name that you get um so you can start to gather data purely and okay they work for this company they're this title um there are tools out there that just from an email typically you can gather that kind of social context um and then we track um i mean where we've used tools like hubspot or there's other zillion tools out there for this but you can track their progression of okay they put in their email they clicked on a try it now link they browse this many pages to your website i mean there's a million tools out there for that you can spend anywhere from 50 bucks a month to five grand a month i mean it's it's that's a really i mean you kind of just have to i typically like to start small make sure that i mean you're you're at least getting value from it but you can always replace these things later and then there's the other side of it of when they're if they get into your app um we've used tools like hotjar um which are the heat mapping um there's uh i can't remember the other one um there's another one where it can like record videos of what they're doing on the website um kind of anonymized videos we've done um we're actually starting to work with segment now where you can essentially do uh tr uh event tracking like they clicked on this link they went through this part of your website like they open this panel um that's a ton of great data that but they have to kind of already be at least a trial customer using their application your application at some point um you can it's excuse me it gets very overwhelming i mean there's so if you wanted to go full bore i mean you could spend 10 grand a month connecting all these pieces up um so i think you really have to be pragmatic about what data you really want um initially most people just start off with data collection like hey i'm going to put up a website with ideas that i have kind of a virtual product and see if you get emails i mean that's a great place to start um if you can even mock up a video of what your app would do or something like that i think we've got a lot of good feedback from just do a loom video recording um with a voiceover or things like that it's a great easy way to describe what you're doing walk it through and people seem to react really well with stuff like that so it's it's a whole spectrum like you said well awesome why i agree there is a whole spectrum and i think that you have to i think that probably the best takeaway is understand your business or at least see what is your what is your business strategy and in other words are you going to be hey the way that we're going to sell is we're going to email everybody and have a big newsletter what we're going to sell is be active on socials the way we're going to sell is have an engaging website that we're going to drive with seo or paid advertising because a lot of that depending on you know the avenues you're going to go you're going to get gather and look at different data so i think that garnering that insight is is definitely beneficial and one thing i'll just throw in there sorry to interrupt um is event marketing is really interesting like going to conferences meeting people where they are it's been hard during covet but we've actually seen a lot of traction just finding some conferences with people that are you think you could potentially sell to and see if you can just ask some questions and just talk to people we've got a ton of great feedback that wasn't even online and it was just you learn from people and so we're actually planning more of that next year of just trying to go to some really interesting conferences just to refine the story refine the pitch and you can kind of do it in real time uh because the people are there to learn about new products and things like that no i think that's that's a great piece of advice as well well we can i'm sure talk about data and and bootstrapping and money and raising and focusing the business and a whole lot of other things and it'd be a great conversation but you know there we do have to make it so that it's not a full day podcast rather a digestible podcast so with that as we start to wrap up i always have one question at the end of each podcast which is you know we've covered several different areas everything from what data to collect to how to collect it to how to analyze it how to bootstrap or raise money what to consider and a lot of different things that are great areas for people that they should and probably should and need to get going on but on the other hand you only have so many hours in the day and only so many things you can get going on at any given time with the business and so if people were to say okay walk away from this and they can only get started on one thing that would get them going um what would that one thing be i think customer discovery by far the i mean there's processes to ask the questions have conversations with potential customers i mean i'd say that if you if folks spend more time just doing that process of learning their market going through the iterations of having conversations before even before putting a website up even before writing a line of code um there's some great resources out there that i mean i don't know just like worksheets and canvases to fill out and all this kind of stuff that's where i suggest to start i think spend the time there make a gel and then move on to to the really heavy lifting i think that's a great great takeaway and great advice so now as we wrap up if people want to reach out to you they want to be a customer they want to be a client they want to be an investor they want to be an employee they want to be your next best friend and you're all of the above what's the best way to reach out to you contact you find out more yeah linkedin uh kirk marple on linkedin um we also have twitter um just on kirkpopple on twitter and we have a company twitter that's uh unstruck um for the for the company but any of those are great all right well i definitely encourage people to reach out to connect and then definitely utilize the expertise well thank you again for coming on the podcast it's been a fun it's been a pleasure now for all of you that are listeners um if you can make sure to click subscribe make sure to click share make sure to click review and here i'll be above because we want to make sure that everybody all those startups and small businesses are looking to grow and improve their business are getting access to this great expertise so make sure to definitely share and leave us a review also if you ever need help with your business with the patent or trademark for anything else feel free to go to strategymeeting.com we're always here to help and always want to make sure to get you taken care of thank you again kirk and wish the next leg of your journey even better than the last thank [Music] you you