By Bitwave 
For the past decade, securing a substantial venture capital funding has been the benchmark of success for startups across various ecosystems. Afterward, startups can finally escape fundraising mode, focus on growth, reach scale, and generate millions (billions?) in annual cash flows. However, for many startups, venture funding is not necessarily the best option – for some, it’s no longer a viable option at all.
With global venture funding in decline, bootstrapping has become an increasingly essential and feasible way to launch and grow a startup. Moreover, it appears that the pendulum has swung back to a time when technical innovation (as opposed to business model innovation or regulatory arbitrage) is happening in nascent spaces such as crypto, climate, and generative AI. Venture capitalists may feel hesitant to invest in companies without a product they can prove is already successful with a growing customer base.
Founders of consumer tech startups can utilize the current market downturn as an opportunity to focus on revenue generation by building products that customers are willing to pay for.
Our Bootstrapping Experience
We launched NordVPN from Lithuania in 2012. Back then, there was a lack of accessible venture capital – that year, Baltic startups merely raised $54.4 million combined compared with $2.4 billion in 2021 – which we had to factor into our corporate growth plans.
Based on our ten years of bootstrapping experience, here are three key principles bootstrapped founders should keep in mind for conceiving, launching, and scaling a successful consumer product:
Focus on Revenue Generation
Without having to manage investor expectations and relationships, bootstrapped founders can and should have a laser-like focus on generating revenue by building a product that users love enough to pay for.
Creative Solutions and Experimentation
Bootstrapped companies, while limited in capital, have a much greater capacity for creative solutions and experimentation. At the beginning, we said no to tools and sought out more unconventional approaches to collecting feedback.
One of the more unconventional avenues we used to collect product insights and feedback was Reddit. There was a core of early adopters there who basically functioned as our user testing group and would provide feedback on existing features, as well as suggest new ones. We realized early on they were the right people with the right incentives to have those types of conversations.
These direct conversations allowed us to better understand the problems our customers were facing and if we were still solving them adequately. Additionally, it meant we could get to know a core group of users. We’ve fostered these relationships over several years – there is a lot to be learned from the changing perspective of a customer, and our sustained interactions also helped drive brand loyalty and advocacy at the user level.
Bootstrapping Revival
Bootstrapped companies can utilize the current funding downturn as an opportunity to create a product their customers truly love, particularly in more nascent industries that investors find riskier to invest in but with more potential for innovation.
Without having to manage investor expectations and relationships, bootstrapped founders can and should have a laser-like focus on generating revenue by building a product that users love enough to pay for. Both VC-backed and bootstrapped startups now face an extended period of profound economic uncertainty, but in the principles outlined above, at least bootstrapped founders have a foundation upon which to conceive, launch, and scale a successful consumer product.
Conclusion
Bootstrapping is once again a viable option for startups, particularly in more nascent industries that investors find riskier to invest in. By focusing on revenue generation and creative solutions, bootstrapped founders can create a product their customers truly love. With the current market downturn, bootstrapped companies have an opportunity to capitalize on the uncertainty and build a successful consumer product.
Bootstrapping: A Foundational Approach
In conclusion, bootstrapping is a foundational approach for startups that can be used in various industries. By focusing on revenue generation and creative solutions, bootstrapped founders can create a product their customers truly love. The current market downturn provides an opportunity for bootstrapped companies to capitalize on the uncertainty and build a successful consumer product.
With the principles outlined above, at least bootstrapped founders have a foundation upon which to conceive, launch, and scale a successful consumer product.