Launching a bootstrapped business: 3 tips for success

Bootstrapping a business is exciting—I've done it a couple times myself (including with my most recent venture, Podcast Hawk), and I also help entrepreneurs build six- and seven-figure businesses on a bootstrap budget using search engine optimization (SEO). But in addition to the excitement, there's a lot of risk, so you want to be sure you're doing it right.

Here are some of the things I tell my clients (and myself!) before launching a bootstrapped business.

Sell your idea—literally

The short of it is: you need to sell your product or service before it exists.

Before you spend any time or money on actually developing your product, sell it. And see if people buy it. This step is crucial for determining if there's even a market for the business. No matter how much market research you've done, you can't really know if people will buy until you try to sell it to them.

Now, how to go about doing this? Depending on what you're planning on selling, there are a few paths you could take. 

• If you plan to sell specialized services, offer the services for free to your network to see if anyone signs up. (If no one wants it for free, certainly no one will pay for it.) 

• If you're looking to start an eCommerce store, you could start with dropshipping or simply pre-sell the product you want to market with a big discount to see if anybody buys it.

• If you're launching a SaaS app, try to sell a hundred lifetime memberships at a steep discount.

There are ways to do this in almost every single business niche—and in none of these cases do you need to actually have the product or service ready to go. Don't worry, you won't be ripping anyone off: if not enough people purchase or sign up, you can simply refund those who did pay and apologize. It's worth it for the amount of time, money, and resources that would be wasted if it turned out no one was interested.

This is exactly what I did when I launched what would later become Live Lingua. At the time, my wife and I just had the idea of offering Spanish lessons online via Skype. We weren't sure if anyone would really be interested in such a thing, so we decided to test it out. I bought a domain and hosting service for $59.99 and a website template for $25. I launched an awful-looking one-page website to see if anyone would sign up—and they did. 

Launch with an MVP

If a lot of people do end up showing an interest in your pre-sale, it's time to get to work. Since you're bootstrapping your enterprise and don't have the money yet to hire, you'll need to deliver your service, build your product, or create the software yourself. The key here is to launch a minimum viable product: give your customers something that works, and then ask them for their feedback. Don't get stuck in the perfection trap.

When we had our first signup for Live Lingua, we had just 24 hours to figure out how to use Skype (it was 2008) and plan the trial class. My wife (the teacher) and I ran around town to get a good microphone and camera, and she then had to quickly create a PowerPoint presentation to use in her first class. Within one hour of the free trial lesson, the student signed up for 50 hours more. Things continued from there, and within 60 days, we had more students than my wife could handle on her own. But more revenue meant we were able to hire more teachers.

Ask for brutally honest feedback

It can be hard to hear, but asking early customers for their candid feedback is crucial. It's always great to know what they like about your product or service, but discovering what they hate about it is even better. This is what will allow you to make sure you're offering something that meets your customers' needs—not just the customers giving you the feedback, but the future customers they represent.

There are plenty of ways to go about this, but the easiest way is to automate the process of sending a survey to anyone who uses your product or service. And to be clear: this isn't something you ever stop doing. It's just that it's particularly important early on as you're making sure that your business is even viable.

During the first year of our journey with Live Lingua, we constantly bugged our students for their honest feedback. Their critiques were paramount in helping us shape our startup into what it is now today: one of the top three online language schools in the world. Based on the feedback our students gave, we made all sorts of changes:

• We started allowing flexible class times.

• We created a system—just using a free Google Drive account—that allowed our students to track their classes and see notes from their teacher.

• We trained our teachers according to the types of instruction students said they liked.

• We used their critiques as a foundation for our systems when we finally started building our own backend class-tracking system.  

Getting this feedback before starting development on our own internal tools saved us a ton of time and money because we already knew what the customer wanted in the system and how they would use it. 

Before you get out there and dive fully into your dream enterprise, make sure to sell your idea, launch an MVP, and get honest feedback from early users. If it works, you'll have a thriving business at the end of it. If not, then at least you didn't waste your precious time and money on a dead end. Now, go give it a shot—and good luck!