Bootstrap’d The Misadventures of Starting a Company

The Bootstrap15:46:34

Yesterday I performed what I consider to be the most significant act in starting a bootstrapped company: The Bootstrap.

This is the act of deciding upon, and then depositing, the amount of money the business will need to start and then turn into a self-funding operation. For me, that initial amount is $3,000. In truth, this number may be higher than necessary if I play my cards right (my current overhead is low), but I want to have a good cushion just in case. My business account had $50 in it from the initial deposit upon creation, so actually I now have $3050 to get my brand new company off the ground.

This is a big step because I had to take my hard-earned savings and devote it to my new venture. This means I now have funds to make business-related purchases and will have to be disciplined about the things I deem necessary to buy. Here’s hoping that a modest sum of $3050 can grow into something much bigger!

For those that already know what “Bootstrapping” means (either in business or computers), you can stop reading here. For those that want to know a bit more about the history of this phrase can continue. I feel some explanation is in order, and it’s always fun to learn something new.

So, what is all this about boots and straps?

You have probably heard the phrase “Pull yourself up by your bootstraps.” This is an ironic idiom because, literally, it is an impossible task. You can try and try, but no matter how strong you are, you cannot lift yourself up.

In computing there is a similar problem. How do you start a computer running? The computer needs to load the program loader so that it can know how to run the initial program. But, wait! The program loader is a program… what tells the computer how to load that??

In starting a new business there is a similar problem. I can start a business that is able to make more money each month than it costs to run, so I can take the money from the business itself to run it. But, how do I get the initial money to start it?

There is a similar answer to all three of these paradoxes: you “cheat” a little, and all by the same mechanism.

In the basic “bootstrap” problem, you use the ground as leverage to push yourself up.

In the computer problem, there is a bit of hardcoded information that tells the computer how to load the program loader, and from there the computer can learn for itself how to load other programs and run them. Did you know that when you “boot  a computer”, it is really just a short-hand way of saying “bootstrapping a computer”? Now you know!

As for the business bootstrap, the initial money comes from personal savings or a small loan – a small source of funding that will be enough to start a business that can then quickly be able to fund itself. The initial funding should be able to be paid back in a short amount of time (or in the case of a personal savings investment, can just be left in the company).

My goal is to take my $3050 and launch a successful, self-funded business from it. It won’t be easy, but now I have a definite financial starting point.

Wish me luck!

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