I mentioned Sequoia Capital’s “Good Times RIP” at the last breakfast and elaborated on it in “Full House in Sunnyvale This Morning” posting, adding pointers to commentary from Hacker News, 37 Signals, and Venture Hacks.
I was delighted to discover Ho Nam‘s Altos Ventures Musings blog and his “RIP Good Times? A Different Perspective” posting about a presentation he put together for an entrepreneur conference last week in Reno. His slideshare presentation is here: RIP Good Times? A Different Perspective
Slide 10 contains some good recipes for Bootstrappers (links added, not in original):
What we look for beyond Capital Efficiency and Hedgehogs
- Simple. Product and value proposition have to be focused, simple, elegant, and obvious–after the fact.
- Small. “Game Changers” start small and grow in unexpected ways. Grandiose plans to “change the world” or “revolutionize an industry” are unlikely to work.
- Leadership. Be the best, otherwise, you will do nothing but show the way for competition.
As bootstrappers we focus on growth enabled by organic profit until and unless we have a business model that deserves outside investment, not outside investment, but I have to say I like the Altos Ventures philosophy. Another partner, Anthony Lee, had a great post about two weeks ago “Don’t Worry Be Scrappy” that also embodies a bootstrapping perspective. Here are some key excerpts but read the whole thing.
The Bad News Let’s first understand that things will be bad – really bad. In fact, this downturn will almost certainly be deeper and longer than the post-Bubble “nuclear winter” of 2001-2004 that so many of us struggled through as entrepreneurs and investors.
The Good News As an entrepreneur, there are a lot of factors that figure into your success or failure. Some you control and most you don’t. Macroeconomics is one that you certainly don’t. So if, like me, you believe in worrying only about the things you can control, then this is a great time to get focused on building your business and stop fretting about the economy (see Focus on the Controllables).
In fact, a recession is probably the best time to start a company. Great companies like Disney, GE, HP and Microsoft were all started during recessions. Why? Bad times can build good DNA. A down economy does not leave room for entrepreneurial sloppiness. It forces entrepreneurs to be honest about how good their products are. It mandates financial discipline. In other words, it is a perfect time to get focused, get real and get lean.
The Rules
- Don’t run out of cash.
- See Rule #1.
Pingback: SKMurphy » Overnight Success