This turned out to be one of the more inter­est­ing ses­sions of the con­fer­ence. Here’s a loose tran­scrip­tion of the boot­strap­ping your startup panel at SXSW. The points cov­ered in this ses­sion are the nuts and bolts of the busi­ness, as impor­tant as the bal­ance sheet.

Kevin Koym   Founder/CEO,   Enterprise Teaming LLC

Bruce Krysiak   Principal,   Leonid Consulting

Allen Beuershausen

Edward Cruz   Founder,   Melior Technologies

Nancy Schill   Founder,   Executive Intelligent Coaching

“Are you build­ing a busi­ness, a non-profit, or artis­tic endeavor? Through build­ing their busi­nesses together, entre­pre­neurs can get to suc­cess faster. We will share exam­ples of how entre­pre­neurs can use less finan­cial cap­i­tal and more social cap­i­tal to make their busi­nesses suc­cess­ful, draw­ing upon our expe­ri­ences with BootstrapAustin.org, and other “enter­prise tribes”. Our panel’s diverse back­grounds will show how this way of build­ing busi­nesses is hav­ing an impact on artist, non-profits, and startup businesses.”

 

Panel dis­cus­sion

The basic phases are pre-ideation, ideation, Val­ley of Death and growth. The “inner path” are the changes you need to make at the rel­e­vant times as you grow.

In the pre-ideation phase, start to put into lan­guage what you like, what you don’t like, etc., in the spirit of “know thy­self”. Where will you spend your men­tal time to cre­ate some­thing you will love.

In the ideation phase, you start to com­mit to the busi­ness. What you develop in the ideation phase is your com­mit­ment to your idea and its place in the world. The other aspects here are imag­i­na­tion and creativity.

When you’re in the “Val­ley of Death”, your pri­mary objec­tive is to stay alive. Do what­ever it takes, get con­sult­ing con­tracts, so you can sus­tain your project. Dur­ing this time, you will learn alot about your­self, and this will give a good sense of your and your project’s iden­tity. Ask your­self three questions:

- Are you try­ing to build a sus­tain­able orga­ni­za­tion?
- Is your team will­ing to push the lim­its dur­ing this period?
- Are you ready to use every­thing in your dis­posal in order to make it?

Unless you’re Super­man, you will face and live with fear. You must put the fear aside, because it par­al­izes you and keeps you from doing the things you need to do. It reduces your open­ness and flex­i­bil­ity. You must be open to every­thing that comes your way that will help you build a sus­tain­able company.

“Growth is a bio­log­i­cal unfold­ing of events involv­ing chang­ing an organ­ism from sim­ple to more com­plex.” Growth is that place where you become more dan­ger­ous, because you are stretch­ing in new direc­tions. The most impor­tant thing right now is not to build your bank account, but to rein­vest your prof­its. Teach and rein­force your pur­pose, your vision, your val­ues and your strate­gies. So just feed­ing your busi­ness more cap­i­tal doesn’t work. You have to do it based on your pur­pose, vision, val­ues and strate­gies. No doing so can throw you back in the Val­ley of Death.

Dring growth, be care­ful of hubris and don’t get too full of your­self. Hubris reduces your open­ness and flex­i­bil­ity, because you think you know every­thing (ie., I did this all myself). Cul­ti­vate humil­ity and grat­i­tude.

Ques­tion and answer

How do you man­age the tran­si­tion from your day job to your project? To cross the thresh­old, you need to jump. There’s a point you’ll feel inside where you know you need to take a leap of faith. You will feel that push. It’s like going into labor. And when you make that leap, you will find resources, because you are look­ing for oppor­tu­ni­ties and because you’re hun­gry.

When do you stop boot­strap­ping and look for fund­ing? You can take fund­ing and still con­tinue boot­strap­ping. It’s not mutu­ally exclu­sive and it is part of the process. After growth, you re-boostrap. Even Apple does it. When you stop inno­vat­ing, you stop being viable.

When do you get busi­ness and med­ical insur­ance? Do it when you can afford it. Here too there is a thresh­old that you’ll have to cross. You have to weigh the risks when you can afford it.

How do you know which oppor­tu­ni­ties to pur­sue while you work on your project? For as long as you pos­si­bly can, keep focussing on your core and grow­ing that core. Keep feed­ing this core until it sprouts some­thing you can’t avoid. Dur­ing the ideation stage, don’t define the project too strictly. Keep con­sid­er­ing new options. But when you’re in the Val­ley of Death or growth stages, then you have to focus and make your project work.

How many months should you have in the bank while you’re grow­ing? A goal of four and a half months is good, but hard to achieve. The closer you get to four and a half months, the more your busi­ness will suf­fer. So a rule of thumb is to take your employee expense and dou­ble it.

When is it appro­pri­ate to start look­ing for tal­ent? What are the best ways … should you use a recruiter? The recruit­ing process works best when you align val­ues. Get some­one that is curi­ous, hard work­ing and shares your val­ues. These are more impor­tant than qual­i­fi­ca­tions. Make it an objec­tive to con­sis­tently inter­view peo­ple. For exam­ple, inter­view six peo­ple per week. You have to keep feed­ing that pipeline so you get choice selec­tions for your organization.

How to man­age work life bal­ance? Should I get a part­ner or an employee? Look into get­ting an intern from local schools, they can be invalu­able. Look for peo­ple with com­ple­men­tary energy, so they bring new tal­ents to your orga­ni­za­tion. Regard­ing time man­age­ment, scrap your todo lists and put what’s nec­es­sary into your cal­en­dar. This way you have a cen­tral place and a strict daily reminder of what needs to hap­pen by the end of the day.