As an early stage entrepreneur, you’ll rarely be short of people offering their (often unsolicited) advice, and many of them will tell you that you can’t succeed as a startup without doing X, Y, and Z. Don’t listen to them. From my experience of bootstrapping a company to over $25 million ARR and 3,800 percent revenue growth over the last five years, I’ve found there are rather a lot of supposedly indispensable things you can do without, as long as you get the basics right. Here are some of them:
1. VC funding
If you can avoid taking on venture capital, then you should do so for two main reasons. First, and most obviously, if you don’t have partners, then you retain ownership of your business. Second, forgoing VC funding means you avoid the conflicts that inevitably arise with investors, whose opinions about the company’s direction may not align with your own. Not accepting venture capital early on allowed my startup to take a long view and focus on our customer’s needs. That said, we recently announced a partnership with Elephant and Highland Europe to accelerate our growth. (And if you’re wondering how that differs from accepting VC funding, check out the story of Basecamp and this video explaining why they sold a small chunk of their business to Jeff Bezos.)
2. A marketing department
If you can’t afford to hire a marketing department, or even one marketing person, then don’t, because you don’t need one right away. Focus on the fundamentals. Figure out the average lifetime value (LTV) of your customer, work backwards to a customer acquisition cost (CAC) that makes you profitable from day one, and then look for the opportunities that are going to provide the biggest bang for your buck. One of the things we did was sign up as sponsors of leading trade shows, which made sense for us because of the high concentration of targets in attendance.
Press is probably the one thing on this list I wish I’d done, but it was an area in which I had no background or experience, and hiring a PR firm wasn’t feasible at the time. Yet too many founders want to be written about just for the sake of it instead of focusing on building a good business. So while I admit I’d love to appear in Forbes, Entrepreneur, and the rest (who wouldn’t?), your personal profile matters far less than time spent on product, sales, and customers.
4. A ‘fancy’ CRM
When considering fancy SaaS products, always think about total cost of ownership. Not only do companies have to take on the upfront costs of such products, but those costs tend to skyrocket when you factor in managing and customizing them. We still use a $20-a-month accounting system, for example. Yes, we looked at all the expensive ones, which can cost anything up to $100k-a-year, but for the stage we are at, our $20 system, so far, suits us just fine.
I’ve got nothing against Slack, and it’s an impressive tool, but we don’t use it. Maybe we will eventually (my employees have asked for it several times), but don’t listen to anyone who tells you you need it. You don’t.
6. “The startup community”
While it has its attractions, becoming overly-involved in the local startup community can quickly turn into just another distraction; an echo chamber of people talking at each other at drinks and events.
7. A government grant
Government grants are time-consuming to apply for and almost always come with strings attached. So instead of spending two months applying for a $100k grant, why not spend that time trying to generate $100k in sales instead?
8. An office
For an early stage company, renting an office is a luxury. Sure, there are downsides to not having a base – you’re heavily reliant on self-motivated team members who can work from anywhere, for one thing. And of course, there comes a point when the disadvantages outweigh the benefits. But a bit like getting written about in magazines, having your company name on an office building door may make it feel like you’ve created a business when you’ve really just created the image of one.
9. Endorsement from anyone but your customers
Literally the only people that really matter are your customers — the people using your platform/service/product every single day — and what they think about you. If they think the support is crap and the features functionality isn’t up to scratch, then, as a startup, you’re not going to be around long enough to get the chance to improve them.
Ross Andrew is founder and CEO of digital marketing company Maropost.com.